Which of the Following Statements Is False

question 23

Multiple Choice

Which of the following statements is false?

• A) If the foreign project is owned by a domestic corporation, managers and shareholders need to determine the home currency value of the foreign currency cash flows.
• B) The most obvious difference between a domestic project and a foreign project is that the foreign project will most likely generate cash flows in a foreign currency.
• C) The risk of the foreign project is unlikely to be exactly the same as the risk of domestic projects (or the firm as a whole), because the foreign project contains residual exchange rate risk that the domestic projects often do not contain.
• D) In an internationally integrated capital market, two equivalent methods are available for calculating the NPV of a foreign project: Either we can calculate the NPV in the foreign country and convert it to the local currency at the forward rate, or we can convert the cash flows of the foreign project into the local currency and then calculate the NPV of these cash flows.

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Definitions:

Lipids

A diverse group of naturally occurring molecules that include fats, oils, waxes, and certain vitamins, serving as energy storage and important cell membrane components.

Monosaccharides

Simple sugars that serve as the most basic form of carbohydrates, such as glucose and fructose.

Symport Process

A type of active transport in which two substances are simultaneously transported across a cell membrane in the same direction by a transporter protein.

Absorption

The process by which substances are taken up into or across tissues, such as the absorption of nutrients through the intestinal tract into the bloodstream.