Describe the Foreign Currency and Home Currency Approaches to Capital

question 21

Essay

Describe the foreign currency and home currency approaches to capital budgeting for a foreign project.Which is better?
Which approach would you recommend a U.S.firm use?
Justify your answer.

---

Definitions:

Shareholder's Ownership

The holding of shares in a company by individuals or entities, providing them ownership interests and possibly dividends.

Corporation's Name

The legal name under which a corporation is registered to conduct business, distinct from its owners and shielded by the corporate veil.

Shareholder

An individual or entity that owns a share or shares of stock in a corporation, thus having an interest in its performance and governance.

Stock

Represents ownership in a corporation, entitling the holder to a share of the company's profits and assets.