Hirsch Ltd is a German multinational company involved in automobile manufacturing. The parent company is based in the city of Ahlen, Germany with its subsidiaries in many countries including Slovakia, Mexico and Thailand. Hirsch manufactures and sells 5 million passenger cars each year. The cars that are manufactured in Slovakia are mainly sold in West European market. The cars manufactured in company’s Mexican plant are mostly sent to US market and the manufacturing plant in Thailand caters to the needs of Asian automobile market. All the cars manufactured in Germany are sold in Germany. Out of the total production of 5 million cars, 30% each are manufactured in Slovakia and Mexico; and 20% each are manufactured in Germany and Thailand. The fundamentals of Hirsch Ltd are quite strong and the company has recently paid good dividend. The company is currently considering acquiring a new subsidiary in Brazil with a view to spread its operations in South America.
The Hirsch Ltd. intends to take advantage of low production costs as well as increase its sales by penetrating South American markets. On the basis of the market research, Hirsch will introduce its new model Riviera, a small car suitable to Brazilian landscape and intends to start production in December 2018. The company is confident of manufacturing and selling 2 million cars in Brazil in the first year. The company has purchased land at a discount price from the Brazilian government. The tests of the new car are successful and the company has found reliable suppliers in Brazil itself. In near future, the company also plans to consolidate its operations with engine and other parts being manufactured in Brazil, and assembly in Mexico.
The initial cost of Brazil project is estimated at 4 billion US dollars. There will be an additional cost of USD 12 billion when the company expands its manufacturing base in Brazil with a view to consolidate all its manufacturing for 7 million cars in Brazil in order to benefit from the economies of scale. The chief financial officer has considered various alternatives to provide this capital including using own funds. Ultimately she has recommended the issue of 10-year bonds in the US market to raise the required capital of $4 billion. The company is confident about the success of its new product and new plans of restructuring and wants to go ahead with this new project.
Task
Write an essay on this potential project. Collect any relevant information. On the basis of the information and your analysis, write an essay with a particular focus on various types of potential risks faced by Hirsch.
You need to follow these points to answer.
1.Host country financial risk(do own research and write accordingly)
1.1 Interest rate(high or low)
1.2 Exchange rate(stability)
1.3 Inflation(stability)
Relate to transaction, economic and translation exposure.

You can refer to Communication Skills Handbook for information on essay-writing. Provide in-text references and reference list in Harvard style.
Important
This assignment is based on chapters 10, 14 and 16 from the text book. However, you need to collect more information from newspapers, magazines, books, journals, reports and any other relevant resources (print and online material) available.