As6 - 1 When a parent allocates funds for a project it should view the projects feasibility from its own perspective It is possible that a project

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1. When a parent allocates funds for a project, it should view the project’s feasibility from its own perspective. It is possible that a project could be feasible from a subsidiary’s perspective but be infeasible when considering a parent’s perspective (due to foreign withholding taxes or exchange rate changes affecting funds remitted to the parent). Some of the more obvious factors are: -exchange rates, -whether currency restrictions may exist, -probability of a host government takeover, -foreign demand for the product. 5. a. Future appreciation of the euro would benefit the parent since the euro earnings would be worth more when remitted and converted to dollars. This is especially true when a large percentage of earnings are sent to the parent. b. The future depreciation of the euro would hurt the parent since the euro earnings would be worth less when remitted and converted to dollars. This is especially true when a large percentage of earnings are sent to the parent. 11.
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This note was uploaded on 12/08/2011 for the course FSNA 415 taught by Professor Chengruhu during the Fall '11 term at SUNY Canton.

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As6 - 1 When a parent allocates funds for a project it should view the projects feasibility from its own perspective It is possible that a project

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