The Home Currency Approach

question 71

Multiple Choice

The home currency approach

• A)requires an applicable exchange rate for every time period for which there is a cash flow.
• B)stresses the use of the real rate of return to compute the net present value (NPV)of a project.
• C)uses the current risk-free nominal rate to discount all of the cash flows related to a project.
• D)generally produces more reliable results than those found using the foreign currency approach.
• E)provides a net project value in both the home and the foreign currency.

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