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Serga [27]
3 years ago
15

When conducting a capital budgeting analysis and attempting to account for effects of exchange rate movements for a foreign proj

ect, inflation ____ included explicitly in the cash flow analysis, and debt payments by the subsidiary ____ included explicitly in the cash flow analysis.
Business
1 answer:
mrs_skeptik [129]3 years ago
4 0

Answer:

inflation <u>SHOULD BE</u> included explicitly in the cash flow analysis, and debt payments by the subsidiary <u>SHOULD BE</u> included explicitly in the cash flow analysis.

Explanation:

A capital budgeting analysis is carried out in order to determine how a company should invest their capital assets.

The discounted cash flow method is the primary tools used in this type of analysis. Cash flows from foreign countries that have high inflation rates will be negatively affected since high inflation tends to currency depreciation which in turn leads to lower cash flows in US dollars. The same applies to debt payments made by the subsidiaries since they also reduce net cash flows. Lower net cash flows result in lower NPV and IRR.

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6 0
2 years ago
Here and After Corporation plans a new issue of preferred stock. Similar risk stock currently offers an annual return to investo
Musya8 [376]

Answer: d. $133.74

Explanation:

The dividend paid to preferred shareholders is constant and based on the annual rate of return on the stock. If they plan to sell at a price of $743 per share, the dividend will be:

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8 0
2 years ago
Which three factors decrease because of protectionism? competition job security domestic production goodwill with trade partners
ludmilkaskok [199]

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Capital markets can be divided into four main categories: private equity, public equity, private debt, and public debt. An examp
scoray [572]

Answer:

<u>Real Property </u>

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Capital markets refer to the market which trades in long term securities whose maturity is more than an year.  The instruments traded in capital markets are usually stocks and bonds.

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