If the parent's perspective is used in analyzing a multinational project, the relevant cash flows are the dollars ultimately received by the parent as a result of the project; the relevant initial outlay is the investment by the parent.

Question

Quizplus · Accepted Answer

The parent's perspective is focused on the impact of the multinational project on the parent company. Therefore, the relevant cash flows are the actual dollars received by the parent, and the initial outlay is the parent's investment in the project. This viewpoint allows the parent company to evaluate the project's profitability and make decisions accordingly.

If the Parent's Perspective Is Used in Analyzing a Multinational