How should the plant be financed should they hedge foreign

Question

• Using information that you gathered from your Phase 4 IP and other course materials, discuss its options and the foreign exchange aspects that affect the financing for the MNC. Include the following:
  • How should the plant be financed?
  • Should they hedge foreign exchange or something else? Explain.
  • Identify 3 foreign exchange instruments you would recommend?
  • What, if any, government regulations that would affect earnings and cash flow should they be aware of?
• Include the need to be aware of inflation and interest rates and how it affects exchange rates.
  • Keep in mind that the country that the plant is in does not necessarily have to be where the financing is done.