What Effect Does the Cash Flow from Foreign Projects Have

question 31

Multiple Choice

What effect does the cash flow from foreign projects have on the NPV calculation?

• A)NPV calculations are not possible if the cash flow is to be received in a foreign currency.
• B)NPV calculations are not affected by the currency in which the cash flow is received.
• C)NPV calculations for foreign projects have to consider currency values at the times that cash flow from the projects will be received.
• D)The discount rate used in NPV calculations takes into account the value of currencies in which cash flow is received.

---

Definitions:

Efficiency Wage

A higher-than-market wage paid by employers to increase worker productivity and loyalty.

Above-Equilibrium Wage

Wages that are set above the market equilibrium, often leading to excess supply of labor and potential unemployment.

Turnover Costs

Expenses associated with replacing personnel, including recruiting, hiring, and training new employees.

Minimum Wage

The lowest legal hourly pay rate that employers can offer to workers.