TOC \o "1-3" \h \z \u 1.0Introduction PAGEREF _Toc385795034 \h 22.0Analysis of Micro Sovereign Risk and their effects PAGEREF _Toc385795035 \h 23.0Analysis of Potential Investments PAGEREF _Toc385795036 \h 3a)Step-1:- Calculation of WACC for both countries PAGEREF _Toc385795037 \h 3b)Step-2:- Analysis of Investment using Capital Budgeting PAGEREF _Toc385795038 \h 45.0Option to Hedge Risks at India PAGEREF _Toc385795039 \h 46.0 Operational Strategies for Managing Operating Exposure PAGEREF _Toc385795040 \h 57.0 Interest Rates and its effects PAGEREF _Toc385795041 \h 6References PAGEREF _Toc385795042 \h 8
IntroductionThis report has been written to do the analysis of the investment option of QN in India and USA using various parameters. India is the world’s seventh largest economy is also the largest and second most populous country of the World. India has recently evolved into one of the fastest growing economies in the world, and is a member of BRIC contributing world growth whereas USA is the world’s largest democracy but is having low or negative growth rate after 2008.
Analysis of Micro Sovereign Risk and their effectsIndia has a diverse mix of all races and ethnic groups. It has a comparative advantage over other nations because of this wide diversity. Above factors are of no benefit for India, if they are not used for competitive advantage over other emerging countries having similar comparative advantage. To establish competitive advantage for India, Indian Government and Industry are working together. Skilled Labour, Capital, Infrastructure facilities are the Factor Conditions along with comparative advantage factors acts as a specialized factor for growth of the industrial activity in India whose pace is more than 12% in last few years. However, the only problem associated with India is uncertain political conditions for the supermarket stores. Hence, it must devise political strategy to counter political risks in India.
The second option...