McKenzie Corporation's Capital Budgeting Paper details: The case study deals with the process of corporate budgeting and the types of decisions that must be made. After reading the scenario: Briefly answer the six questions at the end (2 or 3 sentences each). Include all calculations you were asked to provide. McKenzie Corporation-s Capital Budgeting McKenzie Corporation’s Capital Budgeting Sam McKenzie is the founder and CEO of McKenzie Restaurants, Inc., a regional company. Sam is considering opening several new restaurants. Sally Thornton, the company’s CFO, has been put in charge of the capital budgeting analysis. She has examined the potential for the company’s expansion and determined that the success of the new restaurants will depend critically on the state of the economy next year and over the next few years. McKenzie currently has a bond issue outstanding with a face value of $29 million that is due in one year. Covenants associated with this bond issue prohibit the issuance of any additional debt. This restriction means that the expansion will be entirely financed with equity, at a cost of $5.7 million. Sally has summarized her analysis in the following table, which shows the value of the company in each state of the economy next year, both with and without expansion. Economic Growth Probability Without Expansion With Expansion Low .30 $25,000,000 $27,000,000 Normal .50 $30,000,000 $37,000,000 High .20 $48,000,000 $57,000,000 1.What is the expected value of the company in one year, with and without expansion? Would the company’s stockholders be better off with or without expansion? Why? 2.What is the expected value of the company’s debt in one year, with and without the expansion? 3.One year from now, how much value creation is expected from the expansion? How much value is expected for stockholder? Bondholders? 4.If the company announces that it is not expanding, what do you think will happen to the price of the bonds? What will happen to the price of the bonds if the company does expand? 5.If the company opts not to expand, what are the implications for the company’s future borrowing needs? What are the implications if the company does expand? 6.Because of the bond covenant, the expansion would have to be financed with equity. How would it affect your answer if the expansion were financed with cash on hand instead of new equity?

ave homework for International Finance look at the attachment.

Country Risk Assessment Suppose you have been asked to advise your CEO on the placement of its next foreign office. Your company is in the manufacturing sector. The CEO is only interested in one of the following locations: Botswana (Africa) Ecuador (South America) Sri Lanka (Asia) Turkey (Europe) Part I: You have been asked to compare these four locations with regard to the following five parameters: 1. Natural hazards, 2. Age structure (for potential labor resources), 3. Legal system, 4. Inflation, and 5. Unemployment using the information found in The World Factbook (this is at the following website: Rank the locations from 1-4 in order of preferred location for your manufacturing facility. Recommendation: Use a tabular format to show the information for each parameter by country. Then write a brief statement (1 or 2 typed pages) to analyze how they compare across the parameters and what you recommend to the CEO after your research. Be clear about the reason you are making that specific recommendation. You are allowed to include other parameters from the World Factbook in addition to the ones requested, if you think they will strengthen your selected location. Be sure to list them, if included. Part II: Required for Graduate Students Only: Use The Handbook of Country Risk 2008 : A Guide to International Business and Trade to see what the outlook for foreign direct investment was in 2008. Each country has a short report, generally 3-4 pages long. Read this report and make an assessment (based on any resources you would like to use, but please include other resources as a citation) of how or whether the country’s risk has changed over the 7 years following that report. Your comments should take no more than 1-2 typed pages. Please remember to include your name typed within the Word document that you upload. Do not copy the report of others or allow them to copy your report. If there is evidence of copying, all submissions that are the same will be greatly penalized.