Blakemore Industries Is a Canadian fiRm That Is Considering a New

question 97

Multiple Choice

Blakemore Industries is a Canadian firm that is considering a new project in the U.S. The company requires a 12 percent rate of return on its comparable Canadian projects. The inflation rate in
Canada is expected to be 4 percent while inflation is expected to be 5 percent in the U.S. Based on
This information, you know the required return on the project:

• A) Is 12 percent for both the home currency and the foreign currency approaches.
• B) Is greater than 12 percent if the project is analyzed using the foreign currency approach.
• C) Will be greater than 12 percent if the project is analyzed using the home currency approach.
• D) Will be less than 12 percent if the project is analyzed using the home currency approach.
• E) Will be less than 12 percent if the project is analyzed using the foreign currency approach.

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Definitions:

Psychological Needs

The basic mental requirements for human well-being, such as the need for love, esteem, belonging, and self-actualization.

Social Comparison

The process by which individuals assess their own abilities, achievements, and conditions in comparison to others.

Upward Social Comparison

The process by which individuals compare themselves to others who are perceived to be better off or superior in some way.

Downward Social Comparison

Downward social comparison is a process where individuals compare themselves to others who are less well off in order to feel better about their own situation.