A foreign project in Hungary and another in Japan had the same perceived value from the U.S. parent's perspective. Then, the exchange rate expectations were revised, upward for the value of the Hungarian forint and downward for the Japanese yen. The break-even salvage value for the project in Japan would now be ____ from the parent's perspective.
A) negative
B) higher than that for the Hungarian project
C) lower than that for the Hungarian project
D) the same as that for the Hungarian project
E) negative AND lower than that for the Hungarian project

Question

Quizplus · Accepted Answer

The downward revision of the Japanese yen's value means the U.S. parent would need a higher salvage value to break even, as the yen's depreciation reduces the project's value in U.S. dollars.

A Foreign Project in Hungary and Another in Japan Had