If a Project Has a Positive NPV but the NPV

question 4

Multiple Choice

If a project has a positive NPV but the NPV is greater from the project's than from the parent's perspective, then the parent firm should ______.

• A) accept the project
• B) reject the project
• C) accept the project and hedge the foreign currency cash flows
• D) reject the project and continue to look for positive-NPV projects in the foreign country
• E) None of the above

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Definitions:

Forged

Refers to the illegal modification or creation of a document, artwork, or object with the intent to deceive or defraud by passing it off as genuine.

Liability

The state of being legally responsible for something, especially in terms of debts or damages.

Alteration

An unauthorized change to an instrument that modifies the obligation of a party to the instrument.

Promissory Note

A written promise to pay a specified sum of money to a certain individual or entity at a specified time or on demand.