Which of the Following Is NOT a Reason Why Capital

question 37

Multiple Choice

Which of the following is NOT a reason why capital budgeting for a foreign project is more complex than for a domestic project?

• A) Parent cash flows must be distinguished from project cash flows.
• B) Parent firms must specifically recognize remittance of funds due to differing rules and regulations concerning remittance of cash flows, taxes, and local norms.
• C) Differing rates of inflation exist between the foreign and domestic economies.
• D) All of the above add complexity to the international capital budgeting process.

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Definitions:

Remittances

Money sent by workers to people in another country or region, typically family members, contributing to the receiving economy.

Emigrants

People who leave their country of origin to live permanently in another country.

Immigrant Workers

Immigrant workers are individuals who have moved from one country to another for the purpose of employment.

Substitute Resources

Productive inputs that can be used instead of other inputs in the production process; resources for which an increase in the price of one leads to an increase in the demand for the other.