international investment:

market catelog:

free trading  less potential impact on foreign government

barriers to trade protect domestic trader, higher trade cost than demostic 

major trade agreement

common market

WTO  world trade organization

IMF international Money fedurary

the world bank

financial  planning framework 

international investment apppraisal

same technology as normal investment project 

more concern: FX,  double taxation , intercompany cf, remittance restrictions

decision rules: NPV

international investment

diversify: wider range, consumers, service and goods, cost (material and labor), scarcity resources

increase industry competition 

expend (broading) economic scale

specialisation   comparative advantage in special area

PPP purchase power parity in

S1=S0*(1+Hc)/(1+Hb) 

Hc--foreign currency

Hb--demostic currency

IRP  interst rate parity

F0=S0*（1+Ic)/(1+Ib)

Ic--foreign currency

Ib--demostic currency

exercise ：IRP

S0=$1.6/GDP

interest rate Ic=0.05 USA

interest rate Ib=0.02 British 

S1=1.6*1.05/1.02=$1.65/ GDP

S2=1.65*1.05/1.02=$1.6955/GDP

S1=1.6*1.05/1.02