Vladimir Vitushkin_77719_assignsubmission_file_Final Project Vitushkin Vladimir

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19
Course: International Financial Management
Lecturer: Muhammad Arslan
Final Project: Multinational Logistics Company – “VV”
 
Name:
Vladimir Vitushkin 20161574
 
Spring 2020
Table of Contents:
1. Multinational Logistics Company – “VV”……………………………………………………3
2. Foreign Exchange Market to Ensure Payment for Exports…………………………………...6
3. Forecasting Foreign Currency Movements…………………………………………………...8
4. Establishing a Subsidiary in Foreign Country………………………………………………..13
5. Recognizing Exposure to Exchange Rate Risk……………………………………...………..15
6. Deriving a Required Rate of Return for an International Project and Assessing Exposure to Country Risk……………………………………………………………………………………..17
7. Conclusion…………………………………………………………………………………….18
8. References…………………………………………………………………………………….19
	
1. Multinational Logistics Company – “VV”.
Changes in Kazakhstani economy are now unavoidable and, above all, urgent transportation and logistics infrastructure modernization and expansion are required. It is not only about carrying out initiatives to improve transport and logistics networks, but about managing growth and arranging engagement between various modes of transport and transport service customers. Kazakhstani geographical position at the center of Eurasia, between the largest economically developing countries Russia and China and the wide consuming Central Asian zone, decides the republic's tremendous transit capacity and provides clear prerequisites for Kazakhstani transport network's involvement in the creation of Euro-Asian corridors.
Logistics is an operation that seeks to establish and enforce successful routes for cargo transport, warehouse supply, customs facilities, freight forwarding. Today all of this is very much in demand, particularly if it is done simply, accurately and properly. Economic production requires the need to automate and speed up the distribution phase of the products to the end user. Commercial ties are generally established in the business sector under conditions of intense competition, instability and volatility. It is no longer enough to use just marketing techniques to thrive in entrepreneurial ism, the use of new, highly efficient strategies and strategies for handling streaming processes is needed. Logistics is the most innovative area of science and applied in this field.
The company "VV" will offer services for the delivery of goods using road, rail and other vehicles in Kazakhstan, the CIS countries and Europe. Low delivery time, good reliability and freight safety-that's our company's credo. Huge car park, experienced staff, developed logistics network and a large number of international partners. With highly professional employees and a developed corporate culture, we should become the first assistant to clients in the field of logistics and delivery of goods and parcels throughout Kazakhstan and abroad, offering a wide selection of reliable and effective solutions.
Practice will show that companies using our logistics company will have gained an advantage over competitors and significantly increased profits by reducing costs associated with a reduction in production costs in the field of resource potential. Particular attention on the part of industrial and trade management to the concept of logistics is due to the fact that more attention is paid to the balance and efficiency of the complex of functions such as supply, production, distribution and sale.
What will cooperation with MNC "VV" give you?
-Development of unique logistics solutions of any complexity.
-Full range or separate logistics services.
-Prompt resolution of emerging issues with a personal manager 24 hours a day.
-Integrated system for planning goods flows and reporting based on your requirements.
-Own rolling stock, taking into account the specifics of the transported goods.
-Delivery of large consignments of any size and profile.
-Protection of your commercial and market interests.
-Cargo insurance on favorable terms.
-Use of modern telecommunication technologies in work.
-The possibility of cooperation throughout the year at a fixed price.
	Marketing in logistics is inseparable part of production and business activities, closely integrated with each other. Entrepreneurs can use the concept of marketing in logistics to manage the enterprise independently. At the same time, the best result can be obtained by skillfully using the concept. The essence of marketing is to manage production, market promotion and profitable sales of products focused on existing demand. One of the most important functions of logistics is the organization of material and technical support for consumers. Consumer requirements are not only to send and deliver, things and high quality products, but also to provide on time, at competitive prices for logistic services at a minimum level of total costs. In order to fully comply with these requirements and satisfy the motivation of consumers, an active marketing activity is required. 
The modern marketing concept distinguishes four main complex functions:
-development and planning of the product range,
-information flow management;
-organization of goods distribution and sales,
-advertising and sales promotion.
Each day social networks are rapidly expanding the realms of our life. Tens of thousands of multidirectional social networks give its members the ability to track news from across the globe, post images, videos and songs, and connect. Giants like Facebook, Instagram, Twitter, etc. attract hundreds of millions of users everyday on their websites. Moreover, the overall social networking population is measured at approximately a billion people. Social networks have been an important part of consumers' lives-one person visits over a hundred sites a day on average.
Nowadays, a company's advertising strategy is unimaginable without social media. Companies are seeking to open their representative office on social networks. Social networks are a huge product-marketing platform, which shows very good results with the right approach. A business that doesn't include SMM and promotion strategies loses the opportunity to reach target customers, find out their needs and make themselves known to a significant number of social network users.
The choice of the optimal type of transport is solved in conjunction with other logistics tasks, such as creating and maintaining the optimal level of stocks, choosing the type of packaging, etc. The following characteristics will affect the price of our services:
-Nature of the cargo, its weight, volume, consistency.
-Number of container used.
-Urgency of cargo delivery to the customer.
- Destination place, with temperature, climatic, seasonal characteristics in mind.
-Distance over which the cargo is transported.
-Cargo value.
-The proximity of the transport contact point to the location of the distribution site.
-Safety of cargo, failure to deliver.
	Our goal is to exceed our customers' expectations through total quality management. To have cost-effective and efficient strategies for helping clients meet their goals. Our organization "VV" delivers a variety of reliable and assured distribution services to individuals and enterprises, continually enhancing the quality of operation, implementing emerging technology, efficiently leveraging internal capacity and external capital.
2. Foreign Exchange Market to Ensure Payment for Exports.
A spot market is a market where there are special requirements for settlement between the parties in a trade. These transactions are referred to as spot trades. The most distinguishing characteristic of these transactions is that at the same time as the agreement was completed, new property rights emerge immediately. This is, the buyer receives the requested product instantly, and the seller receives paymentinstantly. If this key criterion is fulfilled, the market is called a spot-the simultaneous completion of the sale, the event of the purchaser's possession of the product, and the seller's income. The cash market is where the financial instruments such as commodities, currencies, and shares are traded for immediate distribution. A futures contract, by contrast, is focused on the arrival of the underlying asset at a future date.
In our company we will use forward foreign exchange rate contracts which is a contractual arrangement between a bank and a customer to buy or sell any amount of foreign currency in the future on a given day. The currency, number, exchange rate and payment date at the time of the transaction are set in this contract. The rate of exchange of a continuing forward trade is called the forward rate.
To exchange the foreign currency received for dollars our company will use JSC Halyk Bank. Since Halyk Bank is the Republic of Kazakhstan's largest universal commercial bank, and one of Kazakhstan's most stable and diversified financial systems. Halyk Group is emerging as a global finance company, providing a wide variety of services to its customers, small and medium-sized companies and corporate clients, including lending, insurance, leasing, brokering and so on. In addition, the bank has subsidiaries in Russia, Georgia and Kyrgyzstan.
The current (15.04.2020) exchange rates you can see on the Graph 1:
Graph 1: Current exchange rates.
Shortly, spread magnitude is the difference between sale price and purchase price. Foreign exchange trading is a type of service provision. You asked the bank to convert your currency and this was done by the bank, taking some payment for the job. When and why did tenge depreciate? The first huge changes appeared on March 10. This was preceded by two events. The first one is "Black Monday" on March 9, when the oil price dropped after the OPEC agreement collapsed, followed by the Kazakh currency. Exchangers started to sell the dollar for 397 tenge per one dollar. The second event is the presentation of Kazakhstani then-chief medical doctor Zhandarbek Bekshin. He said that the country might have the first case of detection of a coronavirus infected on March 16. Due to that at the beginning of April, tenge started to trade for more than 440 tenge per one dollar.
Forward contracts are contracts for purchase or sale. A certain volume of foreign currency at a price agreed upon in future with delivery and payment at a given date. Those arrangements contain only arrangements related to delivery. The danger emerges from the counterparty's potential failure to fulfill the contract terms, as well as in connection with an exchange rate changes. In order to reduce risks when trading on the market, our company will use forward contracts for the purchase of foreign currency as a hedging instrument. According to www.walletinvestor.com (could not access cme.com and oanda.com websites), Kazakh tenge can be an attractive investment choice. Today, (15.04.2020) USD/ KZT equals approximately to 425. A long-term rise is predicted based on projections, and according to the Forex rate estimation for April 2025, tenge will be traded for 588.053. The income is predicted to be around 39% for a 5-year investment. Therefore, importer of our service will be willing to pay us with the home currency. However, it might be a problem for importer due to volatility in currency. Nevertheless, it is not the problem for our company, because we hedged forward contracts for the purchase of foreign currency.
3. Forecasting Foreign Currency Movements.
	The Soviet currency remained the principal currency after independence and until 1993. Yet with Russia's decision to use the latest form of rubles, the Republic of Kazakhstan faced a significant challenge to the economy – to continue with the currency whose reserves could no longer be replenished or converted to their own. In closed session, the Supreme Council agrees to go back to its original name - tenge. A special government commission was formed to determine what Kazakhstan's currency was to be. The Head of State signed a declaration in November 1993 on the beginning of monetary reform. It took 5 days to exchange tenge for soviet currency. The tenge was originally traded for 4.75 tenge for 1$.Tenge is the only currency in the world whose texts are duplicated in two languages. However, Kazakh tenge has 17 degrees of protection so tenge is one of the world's most secure currencies. While tenge is a young currency, let’s wish our currency to be strengthened and stable.
	We consider target foreign currency for our business is USD. Let’s consider dollar index movement for: 
· the last month (Graph 2) and calculate percentage change in this period:
Graph 2: Dollar index movement for the last month.
Change (%) = ((Current Value – Original Value) / Original Value)*100
According to website www.tradingeconomics.com (P.S could not get access to www.oanda.com):
Change (%) = ((99.734-98.342)/98.342)*100 = 1.415%, positive percentage indicates that the index increased during the last month. So, during March 2020 and April 2020, dollar index increased in value by 1.415%.
· the last three months (Graph 3) and calculate percentage change in this period:
Graph 3: Dollar index movement for the last three months.
Change (%) = ((Current Value – Original Value) / Original Value)*100
According to website www.tradingeconomics.com: 
Change (%) = ((99.669-97.233)/97.233)*100 = 2.505%, positive percentage indicates that the index increased during the last three months. So, during January 2020 and April 2020, dollar index increased in value by 2.505%.
· the last year (Graph 4) and calculate percentage change in this period:
Graph 4: Dollar index movement for the last year.
Change (%) = ((Current Value – Original Value) / Original Value)*100
According to website www.tradingeconomics.com: 
Change (%) = ((99.682-97.090)/97.090)*100 = 2.669%, positive percentage indicates that the index increased during the last year. So, during April 2019 and April 2020, dollar index increased in value by 2.669%.
-	the past five years (Graph 5) and calculate percentage change in this period:
Graph 5: Dollar index movement for the past five years.
Change (%) = ((Current Value – Original Value) / Original Value)*100
According to website www.tradingeconomics.com: 
Change (%) = ((99.684-97.985)/97.985)*100 = 1.73%, positive percentage indicates that the index increased during the past five years. So, during April 2015 and April 2020, dollar index increased in value by 1.73%.
	The index for the dollar fluctuates on the basis of economic factors such as inflation, industrial output and geopolitical events. Those considerations will influence how you purchase or sell the currency. According to the calculations above, we can see that dollar index increases in value each period.
	Most investment banks which have already released next year's predictions conclude that the US dollar is most likely waiting for a gradual decline. The flood of market predictions for 2021 by investment banks is almost full, and all conclude on one main point: the dollar is headed towards a moderate slowdown. They believe that next year, after a patchy decade of gains, will see the dollar fall as global growth worries ease, raising demand for riskier investments while keeping or even lowering rates at the same time as the US central bank holds. 
Making predictions for the year ahead is one of the main activities for analysts, as clients including creditors and companies use them as guidance. Yet a year in markets is a long time, so a lot might go wrong. 
	According to www.bis.org/cbanks.htm Kazakhstani central bank is – National Bank of Kazakhstan. Our central bank intervenes to control our currency in the foreign exchange market. For instance, On March 10, Kazakhstani Central Bank reported a 9.25 to 12 percent rise in the base rate. This decision was a response to the tough world marketsituation: the outbreak of coronavirus worsens the outlook for global economic development, and the rapid fall in oil prices over the weekend affects the economies of oil-producing countries, including Kazakhstan. The base rate is one of the central bank's instruments for controlling the economy, and the National Bank has agreed to use it to help macroeconomic stability. Inflation will no longer intensify due to the tenge's weakening, while loans will become more expensive. 		
	The most important that the increase in the base rate supports the national currency, which means that the latest decision of the central bank should strengthen the tenge's position in the market in difficult external conditions. A further weakening of the tenge against foreign currencies may spur inflation growth, therefore, obviously, it was decided to keep it increasing the base rate. To put it another way, rising inflation will push off future price increases. Nevertheless, not all is so simple: some of the goods are imported from abroad into Kazakhstan and thus their value is tied to the foreign exchange rate. Prices will also rise for these groupings of products, that is why our company “VV” might be affected by central bank intervention.
	Economic and political conditions are likely to affect currency quotes. The key factors influencing the exchange rate are the monetary policy decisions of state central banks and foreign organizations about the currency that they sell. While central banks typically do not have the function of controlling the exchange rate, any change in the amount of money in circulation which is a continuously used instrument of leverage by central banks contributes to changes in the exchange rate. The profitability of the products produced in this country influences the exchange rate significantly. Additionally, world consumer demand for commodities, as well as a shift in the quality of products, mainly the technical cause. Forced exports are boosting foreign currency movements. National currency growth is also attributed to the national income growth. That is clarified quite simply because, by rising demand for foreign goods, demand for foreign currency is growing. If domestic product prices are higher than international consumer prices, this raises the incentive to purchase products in other countries, which raises the weakening of domestic currency. A rise in interest rates also results in an inflow of foreign capital into the region, resulting in an increase in domestic currency prices.
	Based on this information let’s forecast dollar exchange rate (USD/KZT) for five years, by using online calculator from www.investing.com: 	
	It is difficult to predict what will be with dollar in the near future, however, as we see from the approximate calculation of forward exchange rate of USD/KZT for the next five years, the foreign currency (USD) will continue to strengthen from 426 tenge per dollar to 660 tenge per dollar. However, our local currency (KZT) will continue to weaken.
4. Establishing a Subsidiary in Foreign Country.
Subsidiary is a separate branch situated outside the company's place of operation. A branch is not an individual legal body, but it has the right to represent the company's interests that created it, and to carry out operations on behalf of the corporation that created it. Let’s consider Russian Federation for establishing subsidiary here. Global firms open their subsidiaries in Russia to carry out trading operations and claim management liabilities in accordance with corporate actions in Russia. These operations may be carried out exclusively by subsidiaries of international corporations from the date of branch accreditation until the expiration of the accreditation period. Creation of a subsidiary in Russia enables the representative office to represent the company's interests in the Russian Federation and to officially secure its property.
Operating with a branch in Russia has the advantages of opening and closing accounts with Russian and international banks, entering into deals, signing contracts. When a branch is opened, a foreign corporation will be considered non-resident and a reciprocal agreement on avoiding double taxation would govern its taxes. When a branch in Russia rents an office, VAT is not included in the contract, as per the Russian Federation's tax code.
To begin working in Russia, branches undergo an accreditation process that lasts no more than 30 working days and will entail payment of 120,000 rubles of state duties. In essence, branches are a type of presence on the Russian market, popular with medium and large foreign companies. Turning to these branches, Russian consumers realize that they approach members of a well-known company, whose quality and value are well known. The presence of a branch in Russia significantly enhances productivity for a global business when dealing with Russians and international clients operating in Russia.
Cash flow statement for a five-year (in million), investment year and four years of operation project, illustrated in Table 1: Table 1. Cash flow statement for a five-year.
The cash flow statement for the “VV” Company shows there was a negative net change in cash -100 cash decrease in Year 0 and -220 in Year 1. However, as can be seen from the cash flow statement, the cash started to increase after the first year, due to increase in the net income for the company logistic operations. 
Eventually, aspects of doing business in Russia contribute to most businessmen being faced with the problem of closing their own companies. Their profession is no more than a means of benefit for many entrepreneurs, and if the corporation fails to produce profits and its continuing life is pointless, then it is time to use exit strategy. Exit strategy of an organization a procedure requiring the filing of documentation leading to the dissolution of a legal body, followed by an entry into the Unified State Registry of Legal Entities. 
There are two types of exit strategies in Russia: voluntary and non-voluntary. A voluntary operation is carried out by the decision of the company's shareholders or their existing entity who has all the authority to carry out any activities on the company's behalf. If one has been developed, it may be done in connection with the expiration of the enterprise. Non-voluntary exit strategy of the industry may be reorganized by court order or by specific state legislators and approved bodies to do so.
Specific forms of exit strategies include complexities, challenges, and characteristics of their own. Each stage requires multiple internal processes and is followed by an immense amount of documentation. The reorganization process is thus highly complicated and involves specific knowledge such as legal, financial, administrative and fiscal. It is typically carried out by specialized companies, which conduct exit strategies procedures professionally.
5. Recognizing Exposure to Exchange Rate Risk.
	Exchange-rate fluctuations have the most significant effect on the success of global corporations competing at the same time, as you know, in many countries, with many currencies. Hence, to maintain a global company's stable position, the financial managers have to track the currency fluctuations closely, both when considering a new country of activity and when organizing operations in the company's current international subsidiaries. Additionally, business executives will respect the currency regimes of the countries in which they wish to work for effective operations in international markets.
	A fixed exchange rate is the rate at which the central bank is obliged to buy or sell foreign currency at a set foreign currency level. To do so, he will have a foreign currency reserve to offset the annual shortfall in the balance of payments. When the funds are small, protectionist steps must be taken and strict regulation will be imposed over the transport of commodities and cash flows overseas.A floating exchange rate is the exchange rate that is dictated not by the value of gold but by the currency's supply and demand. The floating exchange rate mechanism helps you to address the balance of payments equalization issue immediately, and use monetary policy efficiently and control macroeconomic equilibrium. At the same time, it causes confusion, which makes it difficult to spend in the long-term projections, under the control of rapid price volatility will lead to the weakening of the national currency.
	The concept of depreciating means a decrease of the currency's gold value as part of the gold standard's implementation. Today, as the national currency devalues compared to hard currencies, devaluation is seen as the case. The depreciation takes place within state monetary policy system. We may claim the devaluation is an instrument of the effect of the Central Bank on the monetary structure of the country.
	Appreciating is the opposite of depreciating. This reflects national currency appreciation against hard currencies and against gold. If the state follows a strategy of revaluation, then it will have the ability to purchase foreign accounting units at a lower price. Most commonly, domestic currency strengthening is used to hold inflation.
	As the dollar increases, businesses suffer losses, in particular manufacturers of costly products, consumer goods, quality vehicles, etc. Customers tend to buy manufactured goods if required, which can not be replaced by domestic substitutes at the moment, although the primary market is focused on drugs, replacement parts, office supplies and consumables. However, if the dollar exchange rate increases, domestic manufacturers are in a more advantageous position-in these terms, they basically lose significant competition and there is an outstanding chance to achieve market traction. Furthermore, the increase in the price of manufactured commodities usually contributes to higher prices for domestic products.
	Transaction exposure is the level of volatility in an organization engaged in foreign face trade. It is especially the danger of exchange rates fluctuating after the company has already accepted financial obligations. A high degree of exposure to exchange-rate fluctuations will result in substantial capital losses for these foreign companies.
	Economic exposure is the danger that a company can suffer from fluctuating foreign currency exchange rates as a result of cash flow, foreign investment, and earnings. Public information matters most to foreign-owned companies, as it specifically affects their activities. Through expanded world trade, however, many buyers suffer the consequences of economic globalization, as it will affect the rates paying for imported products.
	Translation exposure is a risk of a decrease in the value of a company's assets, equities, profits or liabilities due to exchange rate fluctuations. Companies who denominate a portion of their foreign currency assets, liabilities, and equities face the risk. Multinationals face translation risk largely because their activities and investments are focused in foreign currencies. This risk also affects companies which produce products or services that are sold in foreign markets. One way that firms can limit their exposure to exchange rate changes is to hedge a strategy. By using hedging forward rates, they can fix a favorable exchange rate and avoid risk.
6. Deriving a Required Rate of Return for an International Project and Assessing Exposure to Country Risk.
The capital structure is a mixture of an enterprise's financial reserves from different long-term borrowing channels, or, more generally, the organization's short-term liability ratio, long-term liability and equity. When the company opens, it requires money, depending on which corporate financing sources distinguish between borrowed money or equity. There are two major advantages to the loaned money. Firstly, by calculating the fee, the interest paid is excluded and decreases the total expense of the loan. Secondly, people who offer a loan earn a guaranteed benefit, and lenders will not share their gains if the business is successful. 
Nevertheless, there are drawbacks of lending funds too. Firstly, the higher the leverage level, the more volatile the enterprise and thus the higher the borrowed funds and equity costs to the firm. Secondly, if a company goes through tough periods and its net income is not adequate to fund debt costs, the creditors themselves will have to plug the gap and if they cannot afford so, the corporation will be declared bankrupt. However, firms with unpredictable profits and operational cash flows will restrict borrowing. On the other hand, certain companies that have more robust cash balances will borrow freer.
The company's operations are subject to different life cycles. To determine the company's own capital structure and decide on its restructuring, it is important to understand what stage the company is currently experiencing in its growth. The most complex period of corporate growth and diversification is when it comes to taking decisions on investment and its origins. In fact, most commonly there is a case where the utilization of credit capital will substantially minimize the time needed to produce the economic impact, since the production of income for investments is a long cycle, and the time, as you know, is money. Saving time leads to quicker growth and income maximization for the company.
The capital structure is a combination of the borrowed and own capital ratio generated to fund the company's long-term growth. The effectiveness of the company's strategic policy as a whole depends on how effectively the process is optimized. In addition, its value depends on the optimum combination of borrowed and own money. 
	Geopolitical and economic factors that expose our subsidiary to country risk refers to the volatility associated with investing in a given country, and more precisely the degree to which the volatility may contribute to investor losses. Such volatility can come from a range of causes, including financial, fiscal, exchange rate, or technical. Country risk in particular denotes the risk of a foreign government defaulting on its bonds or other financial commitments, which increases the risk of transfer. In a wider context, country risk is the degree to which political and economic instability affects the securities of issuers in a given country doing business.
Country risk premium reflects the additional income that an investor will require for the risk associated with investing in Russian companies. To calculate Required Rate of Return we use formula: Risk-free rate of return + β * (Market rate of return – Risk-free rate of return). According to website pages.stern.nyu.edu, Russian risk premium is 4.03%, average market rate of return is 10% and average beta coefficient of an investment is two. That is RRR=4.03%+2*(10%-4.03%)=0.1597 
7. Conclusion
Theoretical expertise in the field of logistics was included in the context of researching this project, and in particular transport logistics, the expertise acquired in courses on Corporate Finance and International Financial Management and implemented in practice. As the object of implementation of this information, the business "VV" was selected. When addressing the project's tasks it was obvious that logistics is the process of organizing, handling, monitoring and governing the transfer of content and information flows from their primary source to the final user in space and time. 
The formula for Net Present Value is:
NPV=((-220,000,000/(1+0.1597))+((116,000,000/(1+0.1597)^2)+((210,000,000/(1+0.1597)^3)+
((254,000,000/(1+0.1597)^4)-110,000,000=61,616,970.24$ since we get positive NPV number, our project will be viable.
8. References
1. Halyk Bank (2020). Currency exchange. Retrieved from https://halykbank.kz/en/exchange-rates 
2. Investing (2020). USD/KZT - US Dollar Kazakh Tenge. Retrieved from https://www.investing.com/currencies/usd-kzt-forward-rates3. Establish a Subsidiary in Russia (2019). Retrieved from https://www.companyformationrussia.com/establish-subsidiary-russia 
4. W. Investor (2020). Dollar to Tenge Currency Exchange Rate Prediction. Retrieved from https://walletinvestor.com/forex-forecast/usd-kzt-prediction 
5. Trading economies. Kazakh Tenge. Retrieved from https://tradingeconomics.com/kazakhstan/currency 
6. Forward Rates Calculator. Retrieved from https://www.investing.com/tools/forward-rates-calculator 
7. Country Default Spreads and Risk Premiums (2020). Retrieved from http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html 
8. CURRENCY SPOTLIGHT: KAZAKHSTANI TENGE (2017). Retrieved from https://blog.continentalcurrency.ca/kazakhstani-tenge/ 
9. Kazakhstan expects coronavirus in a few days (2020). Retrieved from https://liter.kz/kazahstan-zhdet-poyavleniya-koronaviru/ 
10. What Are the Advantages & Disadvantages of Establishing the Company's Own Subsidiary Overseas (2020). Retrieved from https://smallbusiness.chron.com/advantages-disadvantages-establishing-companys-own-subsidiary-overseas-34167.html 
11. Open a Business in Russia (2019). Retrieved from https://www.lawyersrussia.com/open-a-business-in-russia 
Year 0Year 1Year 2Year 3Year 4
Cash Flow From Operations:
Net income0-11055100120
Additions:
Depreciation020202020
Increase in Accounts Payable100100100100100
Increase in Accrued Income Taxes (20%)00112024
Substractions:
Increase in AR0-20-30-200
Increase in Inventory-30-40-50-30-20
Net Cash Flow From Operations:70-50106190244
CF From Investing Activities:
Equipment-200-200000
CF Associated with Financing:
Activities Notes Payable2030102010
Net Change in Cash:-110-220116210254
Лист1
		Year 0	Year 1	Year 2	Year 3	Year 4
	Cash Flow From Operations:
	Net income	0	-110	55	100	120
	Additions:
	Depreciation	0	20	20	20	20
	Increase in Accounts Payable	100	100	100	100	100
	Increase in Accrued Income Taxes (20%)	0	0	11	20	24
	Substractions:
	Increase in AR	0	-20	-30	-20	0
	Increase in Inventory	-30	-40	-50	-30	-20
	Net Cash Flow From Operations:	70	-50	106	190	244
	CF From Investing Activities:
	Equipment	-200	-200	0	0	0
	CF Associated with Financing:
	Activities Notes Payable	20	30	10	20	10
	Net Change in Cash:	-110	-220	116	210	254