Treasury and Risk Management Assignment Example | Topics and Well Written Essays - 1000 words

Treasury and Risk Management - Assignment Example The present value of the project stands at $1.15 million dollars over the five periods of exploration. Based on the estimated value of the initial costing of capital, I do not think it will be profitable to undertake the ore extraction (HOWELL, 2007). The cost of exploring the ore’s initial capital stands at more than half of the profit that the project will yield. This is not lucrative based on the fact that the prevailing economic conditions are bound to change. When such a project is to be explored, there are myriad factors that need to be put into consideration. This includes other conditions and political risks such as expropriation. Expropriation refers to the use of private property for public reasons. When such a case occurs, it is pertinent that the affected members be appropriately compensated. It is also essential that the will of the owners of the land be served (BRINK, 2004). However, in such conditions, many of the landowners are usually mistreated by the government hence tarnishing the name of the explorer. This will, in turn, affect them politically in terms of popularity and international relations. Therefore if expropriation will be avoided or stands at low percentages, then it will be okay to proceed with the ore extraction. However, if the percentage is large, then it will not be good to proceed with the project. In a meeting to discuss expropriation, I would be glad to invite major stakeholders to the project. This will involve a representative from the US government and that of the Mexican state government to discuss the issue. There shall be also the head of the company that is contracted to undertake the exploration and a representative of the people in the area of exploration. The data and information necessary for such a meeting will include documents to sign the agreement of certain terms by the parties.  There must also be data on past expropriation experienced noticed in the Mexican government so as to justify the cost of the same.