The Impact of Blocked Funds on the Net Present Value

question 32

Multiple Choice

The impact of blocked funds on the net present value of a foreign project will be greater if interest rates are ____ in the host country and there are ____ investment opportunities in the host country.​

• A) ​very high; limited
• B) ​very low; limited
• C) ​very low; numerous
• D) ​very high; numerous

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Definitions:

Interest Rates

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Strong Dollar

A situation where the U.S. dollar has a high value compared to other currencies, usually implying greater purchasing power in the international market.

Euro

A currency system utilized by 19 of the total 27 nations in the European Union, widely recognized as the eurozone.

Vacation

A period of time devoted to rest, relaxation, or travel, often taken away from work or daily responsibilities.