Two methods were discussed to evaluate a foreign capital budgeting project for a MNC's. Which was not
Question:
Two methods were discussed to evaluate a foreign capital budgeting project for a MNC's. Which was not one of these?
a. Estimate future cash flows in foreign currency; convert to the home currency at the predicted exchange rate; calculate NPV using the home currency cost of capital.
b. Estimate future cash flows in foreign currency; convert to the home currency at the predicted exchange rate; calculate NPV using the foreign currency cost of capital.
c. Estimate future cash flows in the foreign currency; estimate the foreign currency discount rate; calculate the foreign currency NPV using the foreign cost of capital; translate the foreign currency NPV into dollars using the spot exchange rate.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill