Which of the Following Statements Is FALSE

question 12

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)In an internationally integrated capital market, two equivalent methods are available for calculating the net present value (NPV)of a foreign project: Either we can calculate the net present value (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 net present value (NPV)of these cash flows.
• 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)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.

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Definitions:

Binocular Depth Cues

Visual information taken in by two eyes that enable the perception of depth and distance, essential for seeing the world in three dimensions.

Loudness

The subjective perception of the strength or intensity of a sound, which can vary based on the sound's amplitude and the listener's hearing ability.

Tonal Quality

The characteristic sound of a voice or musical instrument, often described in terms of its pitch, strength, and timbre.

Richness

The state of being abundant or plentiful, especially in terms of wealth, quality, or diversity.