Should the anticipated internal rate of return (IRR) for a proposed foreign project be compared to (1) alternative home country proposals, (2) returns earned by local companies in the same industry and/or risk class, or (3) both? Justify your answer.
Answer to relevant QuestionsIn the context of evaluating foreign investment proposals, how should a multinational firm evaluate cash flows in the host foreign country that are blocked from being repatriated to the firm’s home country? As a financial manager, would you prefer that the accounts payable period end before, at the same time, or after the beginning of the accounts receivable period? Explain. Why might the time lag for intramultinational firm accounts receivable and payable (that is, all received or paid to a parent or sister subsidiary) differ substantially from the time lags reported for transactions with ...What is the difference between a foreign branch and a foreign subsidiary of a home-country bank? Inca Breweries of Lima, Peru, has received an order for 10,000 cartons of beer from Alicante Importers of Alicante, Spain. The beer will be exported to Spain under the terms of a letter of credit issued by a Madrid bank on ...
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