When a multinational firm invests abroad, it is common to develop two capital budgets: one from the project viewpoint, and one from the parent viewpoint.

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Developing two capital budgets, one from the project viewpoint and one from the parent viewpoint, is a common practice for multinational firms investing abroad. The project budget focuses on the specific needs of the project and assesses the financial viability of the investment. The parent budget considers the impact of the investment on the overall financial position of the parent company and ensures that the investment aligns with its strategic objectives. This helps the firm make informed decisions and allocate resources effectively.

When a Multinational Firm Invests Abroad, It Is Common to Develop