Which of the Following Is Characteristic of the Parent's Perspective

question 34

Multiple Choice

Which of the following is characteristic of the parent's perspective in capital budgeting?

• A) It estimates future cash flows from the project in the functional currency.
• B) It adds the subsidiary's after-tax operating cash flows with the project's cost of capital.
• C) It seldom uses the currency of the primary economic environment in which it operates.
• D) It estimates the incremental after-tax operating cash flows in the subsidiary's local currency.

---

Definitions:

Gravel

Coarse granular material, consisting of rounded or angular fragments, often used in construction and landscaping.

Transgression

The advance of the sea across the land and the evidence of such an advance.

Regression

The retreat of the sea from land areas and evidence of such withdrawal.

Sandstone

A sedimentary rock composed mainly of sand-sized mineral particles or rock fragments.