Foreign Direct Investment Imperial

TUGAS MULTINATIONAL FINANCE

FOREIGN DIRECT INVESTMENT

Dikerjakan Oleh: DWI WIDAYAT

17/417229/PEK/22792

OKTAVIANUS OKI BAGUS K

17/417296/PEK/22859

MAGISTER MANAJEMEN FAKULTAS EKONOMIKA DAN BISNIS UNIVERSITAS GADJAH MADA YOGYAKARTA 2018

IMPERIAL POWER  –  SPAIN

Di akhir tahun 1978 manajemen dari Imperial Power Company (IPC) mempertimbangkan untuk melaksanakan ekspansi ke level internasional. IPC sendiri merupakan perusahaan manufaktur yang berbasis di Chicago yang memproduksi mesin-mesin yang digunakan untuk  peralatan rumah tangga, otomotif dan peralatan industry. Mayoritas produk yang dihasilkan dari IPC digunakan untuk industry-industri otomotif. Anak perusahaan dari IPC sendiri tersebar di wilayah Jerman, Prancis, Brazil, Filipina, maupun di Amerika Serikat. Berkenaan dengan hal tersebut IPC mengalami kendala dalam melakukan ekspansi. Hal ini disebabkan pasar di Eropa telah mengalami tingkat yang jenuh (saturated). Sehingga IPC lebih hati-hati dalam melakukan kegiatan ekspansinya di Eropa. Dalam hal ini, ada 2 pilihan tujuan dalam melakukan ekspansi, yakni Prancis dan Spanyol. Namun demikian kedua negara tersebut memiliki karakteristik yang  berbeda terkait insentif dan perpajakan yang diterapkan dalam menyerap investasi dari luar (swasta).

TABLE 1

TOTAL SALES VOLUME AND REVENUE 1979

Domestic Sales  1. Units budgeted to be sold  2. Unit sales price (15% p.a. increase) 3. Domestic s Export Sales  4. Pta. unit price in Spain (line 2)  5. Forecast Exchange rate, Pta./FF  6. Unit price in French francs  7. Change in franc price over prior year  8. Less allowable 5% annual inflation  9. Relative price change over prior year1 10. Resulting volume change (times -1.5) 11. Prior year sales volume 12. Increase for 10% growth 13. Volume before price effect 14. Times elasticity factor (line 10)2 15. Units budgeted to be sold 16. Times unit price (in pesetas) 17. Export sales revenue (Ptas. 000) Calculation of Sales Volume 18. Domestic Volume (line 1) 19. Export Volume (line 15) 20. Total Unit Volume

1980

50000 60000 x 1,300 x 1,495 65000 89700

1300 16,67 77,98

1495 17,5 85,43 9,55% -5,00% 4,55% -6,82% 150000 15000 165000 x 0.9318 150000 153747 x 1,300 x 1,495 195000 229852

50000 150000 200000

60000 153747 213747

EXHIBIT 2

COST CALCULATIONS 1979

1980

Calculation of per-unit cost of imported material (Note: 20% of Ptas . 840 = Ptas . 168 21. Original dollar unit cost (Ptas. 168/70) 22. Adjusted to U.S. inflation rate (times 1.05n) 23. Inflated dollar unit cost 24. Exchange rate (year begin) 25. Peseta unit cost of imported material

$2,40 $2,40 x 1.0000 x 1.0500 2,4 2,52 70 70 168 176,4

Calculation of peset a interest expens e 26. Dollar interest paid (10% x $600,000) 27. Exchange rate (year end) 28. Peseta interest expense (000)

$60.000 70 4200

$60.000 85 5100

$30.000 70 2100

$30.000 85 2550

Calculation of peset a royalty expens e 29. Dollar royalties paid 30. Exchange rate (year end) 31. Peseta royalty expense (000)

TABLE 3

PRO-FORMA INCOME STATEMENTS (Pta 000)

Revenue from Sales 32. Domestic sales revenue (line 3) 33. Export sales revenue (line 17) 34. Total revenue Expenses 35. Import material/unit (line 25) 36. Domestic material/unit (840)(0.4)(1.15)n 37. Labor/unit (840)(0.4)(1.15)n 38. Total unit variable cos ts 39. Times unit sales volume (line 20) 40. Total variable costs (Ptas 000) 41. Manufacturing overhead (x 1.15n) 42. Depreciation (10% of cost) 43. Interest (line 28) 44. Royalties (line 31) 45. Total expenses Profit & Dividend Calculation 46. Net income before tax 47. Less 30% income tax 48. Net income after tax 49. Less 10% dividend tax 50. Dividend paid to IPC (US) Dollar equivalents on above 51. Year-end exchange rate 52. Net income before income tax ($) 53. Income & Dividend taxes paid 54. Dividend paid to IPC (US)

1979

1980

65000 195000 260000

89700 229852 319552

168 176,4 336 386,4 336 386,4 840 949,2 x 200,000 x 213,747 168000 75000 7000 4200 2100 256300

202889 86250 7000 5100 2550 303789

3700 1110 2590 259 2331

15763 4729 11034 1103 9931

70 52857 19557 33300

85 185447 68612 116835

TABLE 4

PROJECT CASH FLOWS (Pta 000) 1978

Cash Inflows 55. Net income after tax (line 48) 56. Depreciation (line 42) 57. Interest after tax (line 28 x 0.7) 58. Recapture of working capital3 59. Net terminal value4 60. Total cash inflow

------

1979

1980

2590 7000 2940

11034 7000 3570

--

---

-12530

Cash Outflows 61. Net working capital 62. Equipment 63. Total outflows

77000 -70000 -147000 --

Cash Flow Analysis 64. Net cash flows 65. 16% present value factor 66. Present value of each cash flow 67. Cumulative net present value

21604

----

-147000 1 -147000 -147000

12530 0,8621 10802 -136198

21604 0,7432 16056 -120142

68. Approximate internal rate of return = 46%

TABLE 5

PARENT CASH FLOW ANALYSIS (US$) 1978

Cash Inflows 69. Dividends from IPC-Spain (line 54) 70. Royalty receipts from IPC-Spain (line 29) 71. Net terminal value5 72. Total cash inflow Cash Outflows 73. Parent equity investment 74. Pre-tax income, IPC-Spain (line 52) 75. U.S. taxes at 50% 76. Less credit for Spanish taxes (line 53) 77. U.S. taxes payable on dividend income 78. U.S. taxes payable on royalty income 79. Total outflow Cash Flow Analysis 80. Net cash flow 81. 16% value factor 82. Present value of each cash flow 83. Cumulative net present value 84. Approx. internal rate o f return =27%

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1979

1980

33300 30000

116835 30000

--

-63300

1500000 -------

146835

--

1500000

52857 26428 19557 6871 15000 21871

185447 92723 68612 24111 15000 39111

-1500000 1 -1500000 -1500000

41429 0,8621 35716 -1464284

107724 0,7432 80060 -1384224