Short answer/discussion: international capital budgeting

“International Capital Budgeting” Please respond to the following:

  • Examine the conditions under which the capital expenditure of a foreign subsidiary might have a positive net present value (NPV) in total currency terms but be unprofitable from the parent firm’s perspective. Create a (very) brief scenario that illustrates the conditions.
  • Analyze the adjusted present value (APV) methodology and make at least one recommendation for improvement. Explain your rationale.

 
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