MNEs must modify finance theories like cost of capital and capital budgeting because of foreign complexities.
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Which of the following is NOT an example of a financial cash flow?
A. parent invested equity capital
B. intrafirm principal payments
C. interest on intrafirm lending
D. export or import of goods and services
Toyota Corporation operates in many different countries and pays taxes at many different rates. However, they always pay the same rate as their local competitors. Toyota is operating in an environment of _________ tax policy.
A. foreign neutrality
B. territorial approach
C. domestic neutrality
D. none of the above
A ________ transaction in the foreign exchange market requires delivery of foreign exchange at some future date.
A. currency
B. forward
C. spot
D. swap
When a foreign project is analyzed from the parent's point of view, the additional risk that stems from it "foreign" location is typically measured by _________ or ________.
A. adjusting the timing; adjusting the cash flows
B. adjusting the discount rates; adjusting the cash flows
C. adjusting the discount rates; adjusting the timing
D. none of the above