You Can Value Overseas Investments Using the NPV of the Cash

question 63

Multiple Choice

You can value overseas investments using the NPV of the cash flows.Which of the following adjustment is necessary to calculate the NPV?

• A) Convert the opportunity cost of capital and cash flows into foreign currency.
• B) Convert the foreign cash flows into domestic currency and use the domestic opportunity cost of capital for discounting.
• C) Use domestic discount rate to discount foreign cash flows.
• D) Convert the foreign cash flow into domestic currency and use the foreign cost of capital for discounting.

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The condition that exists when all markets in an economy are in simultaneous equilibrium.

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