Which of the Following Statements Regarding Guarantees and Government Restrictions

question 82

Multiple Choice

Which of the following statements regarding guarantees and government restrictions on international projects is (are) true?
I.The value of the guarantees is added to the APV.
II.The value of the guarantees is subtracted from the APV.
III.The value of the government restrictions is added to the APV.
IV.The value of the government restrictions is subtracted from the APV.

• A)I and III only
• B)II and III only
• C)II and IV only
• D)I and IV only

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Definitions:

Cash Flows

The complete sum of funds moving into and out of an enterprise, predominantly affecting its ability to cover short-term obligations.

Time Value

The principle that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate.