Question: Question 1 Net present value (NPV) is a tool of Capital budgeting to analyze the profitability of a project or investment. It is calculated

Question 1 Net present value (NPV) is a tool of Capital budgeting

Question 1 Net present value (NPV) is a tool of Capital budgeting to analyze the profitability of a project or investment. It is calculated by taking the difference between the present value of cash inflows and present value of cash outflows over a period of time. 1a. What makes calculation of NPV for a foreign investment project more complex than the calculation of NPV for a domestic project? 1b. How does the evaluation of a potential foreign capital investment differ under the parent company perspective versus under the project perspective? Question 2 In 2001, International Accounting Standards Board (IASB) replaced International Accounting Standards Committee (IASC) as the creator of international accounting standards. 2a. What are the main objectives of IASC and IASB? What are the differences between these main objectives? 2b. What are the potential benefits that a multinational corporation could derive from the international convergence of accounting standards?

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