The NPV of a Foreign Investment Will Be Lower If

question 53

Multiple Choice

The NPV of a foreign investment will be lower if:

• A) not all cash flows are remitted to the parent and unremitted cash flows are reinvested at a rate equal to the domestic cost of capital.
• B) not all cash flows are remitted to the parent and unremitted cash flows are reinvested at a rate less than the domestic cost of capital.
• C) all cash flows are remitted to the parent and are reinvested at a rate equal to the domestic cost of capital.
• D) Remittance rates nor foreign reinvestment rates do not affect the NPV.

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