What additional complexities arise when multinational corporations consider capital projects on a global basis?
What will be an ideal response?
Considerations must be given to the impact on projected cash flows from differences in tax laws and tax rates, exchange rate controls and changes, limitations on repatriation of profits, tariffs and quotas on imported products, and special licensing fees. In addition, rates used to discount cash flows back to present values must be adjusted for differences in rates of inflation and taxes, and risks associated with expropriation of assets and political-social instability.
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As a form of business, a partnership
A) cannot issue stock. B) has limited liability. C) has the most government rules and regulations affecting it. D) has only one owner.
What is the internal rate of return on a new $2,000 heater that would reduce your heating costs by $200 a year forever? Under what conditions would you make the purchase?
What will be an ideal response?