Explain how political risk and exchange rate risk increase the uncertainty of international projects for the purpose of capital budgeting
What will be an ideal response?
Answer: The evaluation of foreign projects must consider several risks that are either nonexistent or much less important in domestic capital budgeting. First, if revenues and expenses are in a foreign currency, then the parent firm must estimate the exchange rate at which the foreign currency will be converted into the domestic currency. To estimate future exchange rates, the parent firm must estimate expected rates of inflation and interest rates in both countries, economic growth in each country, as well as consumer preferences and tastes in more than one country. Then, aspects of political risk must be considered. What is the likelihood that all or part of the cash flows accruing to the parent firm will be restricted through some political act? The firm must now consider the possibility of changing tax rates, new taxes, and additional restrictions on the flow of funds. Furthermore, local norms may differ from usual firm practice in terms of financing or dividend policy. Domestic capital budgeting may seem quite easy in comparison.
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Odd parity checking is
a. able to detect all errors, but not correct them b. able to detect and correct all errors c. able to detect some errors, but not correct them d. able to detect some errors and correct them
Although lawyer advertising can be regulated, many jurisdictions do not require lawyer advertising to be __________, although the ABA Model Code required it.
Fill in the blank(s) with the appropriate word(s).
Write the SQL query on the table VEHICLE that lists once the owner ID and owner name of each owner
What will be an ideal response?