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International Financial Management Study Set 1
Quiz 14: Multinational Capital Budgeting
16
Question 16
True False
16.If a multinational project is assessed from the subsidiary's perspective, withholding taxes are ignored for project assessment.
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Q 17
17)Other things being equal, firms from a particular home country will engage in more international acquisitions if they expect foreign currencies to ____ against their home currency, and if their cost of capital is relatively ____. A) appreciate; low B) appreciate; high C) depreciate; high D) depreciate; low
Q 18
18)The discrepancy between the feasibility of a project in a host country from the perspective of the U.S. parent versus the subsidiary administering the project is likely to be greater for projects in countries where: A) the taxes are the same as in the U.S. B) there are no blocked fund restrictions. C) the currency of the host country is expected to depreciate consistently. D) none of the above; a discrepancy is not possible.
Q 19
19)The break-even salvage value of a particular project is the salvage value necessary to: A) offset any losses incurred by the subsidiary in a given year. B) offset any losses incurred by the MNC overall in a given year. C) make the project have zero profits. D) make the project's return equal the required rate of return.
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