Question: I need help responding to this discussion please. Potential foreign investment project is whether it should be evaluated on the basis of project cash flows
I need help responding to this discussion please.
Potential foreign investment project is whether it should be evaluated on the basis of project cash flows which is in local currency while parent cash flows are in parent currency which requires taking into account the amount, timing, and form of transfers to the parent company. Projectperspective should consider taxes, rate of inflation and political risk. Parentcompany perspective has additionalfactors to consider: for in which cash is remitted to the parent, foreign exchange risk, political risk. "Foreigncapital investment opportunities can be evaluated from a projective, focusing on a project cash flows in local currency, and/or from a parent company perspective, focusing on parent cash flows in parent currency"
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