Which Is NOT Considered a Shortcoming of the Parent Simply

question 52

Multiple Choice

Which is NOT considered a shortcoming of the parent simply adjusting discount rates to account for the additional risk that stems from a project's foreign location?

• A) Cash flows are already highly subjective.
• B) Two-sided risk in that foreign currency may appreciate or depreciate.
• C) Increased sales volume might offset the lower value of a local currency.
• D) These are all shortcomings associated with discount rate adjustment.

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Definitions:

Stock Prices

The current price at which a share of a company is traded on the stock market, influenced by various factors including company performance, market conditions, and investor sentiment.

Inventory Investment

Changes in the stocks of finished goods and raw materials that firms keep in reserve to meet orders.

Positive

In economics and finance, "positive" often refers to positive movements in markets or indicators, or affirmations of beneficial aspects of economic policies or conditions.

Negative

Refers to a condition or quantity less than zero, often indicating a deficit or loss in financial contexts.