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Assume that an Australian-based firm evaluates a foreign project located in Japan that generates Japanese yen cash flows. Assume that the project has a positive
Assume that an Australian-based firm evaluates a foreign project located in Japan that generates Japanese yen cash flows. Assume that the project has a positive NPV when evaluated from the "project perspective", but a negative NPV when evaluated from the "parent perspective". Which of the following is most likely a correct course of action for the firm in this circumstance? Select one: Accept the project if the firm is able to securitize and then sell it to local investors in Japan. Reject the project definitely and instead look for projects that have a more-positive NPVs in Japanese yen Accept the project and leave the project's cash flows unhedged Reject the project under all potential circumstances
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