International finance Research Paper Example | Topics and Well Written Essays - 1750 words

International finance - Research Paper Example Engaging in International trade is important for the economies of the two or more countries involved; because there is an exchange of foreign currencies, creation of jobs and enhancement of revenues through taxation of the business profits. For multi-national organizations to survive in this import and export trade, they have to employ financial tools in their assessments, and this includes financial agreements and use of security exchanges. A product of trade in international finance varies depending on locations, legal requirements of operating in such destinations and transaction requirements. This paper seeks to assess the impact of selling beverages from United States of America into the Kenyan market. Abinam Inc. has been in the beverage industry for over 20 years, and recently decided to expand its operations in Africa, and specifically East Africa. To start its operations, the company identified Kenya as a convenient starting point because of its economic dominance in East Af rica, and the high quality its infrastructure, which includes roads and telecommunications. The Kenyan political structure advocates for liberalization and a free market economy and all this are conducive for our operations. Kenya is a lucrative destination of the beverage industry because of the financial capabilities of its citizens and their thirst for new ideas and products. In analyzing the practicality of beverage sale in Kenya, this paper seeks to identify the different methods of International Business that Abinam Inc. will employ in the Kenyan market. It will assess Kenyan balance of current account in the last ten years to determine whether the planned beverage product is an export of the country. This paper will analyze Kenyan main exports and thereafter use them to predict the profitability rate of the beverage products. In achieving this, this paper will scrutinize the import data of Kenya for the last ten years and thereafter make a conclusion regarding the beverage pr oducts. This paper will review the import control mechanisms of the Kenyan State in order to assess the possibility of Abinam Inc. in conducting trade in the and its effects in its operations. In analyzing these mechanisms, this paper will identify specific controls set by the Kenyan government, giving an explanation of its intended objectives and thereafter its effect in the operations of beverage sale of Abinam Inc. This paper will review the changes in the various currencies of the two states, i.e. American Dollar and the Kenyan Shilling. This will help in analyzing the type of currencies to use, since changes in currencies can affect the profitability of a business organization. In understanding the foreign exchange rates of the two currencies, Abinam Inc. will be able to develop currency features which will minimize risks associated with fluctuations in foreign exchange rate. This paper has a conclusion, which highlights the process of registering a business organization in Ken ya. Kenyan economy is agriculturally based and it imports most of its products from Europe and Asia, because of this, most of its international trade is skewed in favor of the industrialized states. In the last ten years, the Kenyan current account has seen a deficit (Goswami and Matoo, 2012). A current account is the balance between values of the country’s imports compared to the revenues generated from its exports. The current