Question
Which of the following statement is True? Group of answer choices a. the cost of capital is determined by the company based on the project
Which of the following statement is True? Group of answer choices
a. the cost of capital is determined by the company based on the project risk.
b.the cost of capital of MNCs and domestic company are NOT different for the same project.
c.the cost of capital of MNCs and domestic company are NOT different as domestic investors pursue higher return.
d. The cost of capital depends on the extent of investor diversification into domestic or international portfolio.
What makes the capital budgeting for a Foreign Project complex than domestic project?
a.IRR is used for foreign project, while NPV is used for domestic project.
b. incremental CF is considered only for foreign project, not for domestic project.
c. for both foreign and domestic project, a company adopt capital budgeting from parent and subsidiary point of view separately.
d. remittance of funds from subsidiary to parent needs to be considers for foreign project, not for domestic project. E). Evaluation of a subsidiary from the local viewpoint is the same as the evaluation of a subsidiary from parent viewpoint.
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