International Business Finance Issues in IBF Supplies Plc and Joe Research Paper

International Business Finance Issues in IBF Supplies Plc and Joe Company - Research Paper Example Multinational vs. domestic capital budgeting project: consideration of additional factors 9 Characteristics of multinational companies (MNCs) affecting the cost of capital 10 Ram plc and Pram plc: Benefits from economies of scale 10 Theory of Comparative Advantage as a motive for international trade: Usefulness 11 Reference 13 1. IBF Supplies Plc: Financial and non-financial factors influencing the proposal of establishing subsidiaries in Eastern Europe, Africa as well as Asia IBF Supplies Plc is one of the leading companies in the UK market in supplying office items to its clients. The company holds a competitive edge over its competitors as it supplies the office items at a competitive price and also the time of delivery of IBF Supplies Plc is comparatively low. The management of the company has assessed that there would be a decrease in demand in the domestic markets in future for which the Director has envisaged the expansion of the company into foreign markets. IBF Supplies Plc found there is an increasing demand for the supply of its products in the markets of Eastern Europe, Africa as well as Asia. The financial factors to be considered in the proposal of establishing foreign subsidiaries of IBF Supplies Plc in Eastern Europe, Africa as well as Asia includes assessment of the economy of the respective local markets, the costs involved in the foreign investments which ranges from the cost of raising of capital, cost for working capital, financing costs, etc. The financial factors also include assessment of financial risks, benefits and disadvantages associated with the foreign investments of IBF Supplies Plc. The non-financial factors to be considered which influences the foreign investment proposal of IBF Supplies Plc are the social factors, political factors, technological factors and the legal factors of the foreign land that has an impact on the business of IBF Supplies Plc.