Can an investment project of a foreign subsidiary that has a positive net present value when evaluated as a stand-alone firm ever be rejected by the parent corporation?
Assume that the parent accepts all projects with positive adjusted net present values.
Yes, we know that countries impose withholding taxes on the dividends that are repatriated from subsidiaries to parent corporations. These taxes lower the value of the project to the parent. The parent must also be aware of the possibility of future problems accessing the foreign exchange market from the subsidiary's country. In general, political risk could be different for a subsidiary of a multinational corporation versus a local stand-alone firm.
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All of the following are examples of internal control activities except
a. rotation of key personnel. b. company picnics for all employees. c. bank reconciliations. d. insistence that employees take earned vacations.
With careful planning, project risk can be reduced to zero
Indicate whether the statement is true or false
The income statement for Bedtime Company is divided by its two product lines, blankets and pillows, as follows
Blankets Pillows Total Sales revenue $620,000 $300,000 $920,000 Variable costs (445,000 ) (240,000 ) (685,000 ) Contribution margin $175,000 $60,000 $235,000 Fixed costs (75,000 ) (76,000 ) (151,000 ) Operating income (loss) $100,000 $(16,000 ) $84,000 Bedtime is considering eliminating the pillows product line. If this line is eliminated, Bedtime will be able to eliminate $73,000 of total fixed costs. How would this business decision impact operating income? A) increase of $73,000 in operating income B) decrease of $60,000 in operating income C) increase of $136,000 in operating income D) increase of $13,000 in operating income
A condition, as used in the law of contracts, is an event that affects a duty of performance under a contract
Indicate whether the statement is true or false