All of the following are characteristic of the parent's perspective approach in capital budgeting EXCEPT that it ________.
A) estimates future cash flows from the project
B) uses the subsidiary's local currency
C) forecasts forward rates
D) uses the functional currency of the parent

Question

Quizplus · Accepted Answer

The parent's perspective approach in capital budgeting typically uses the functional currency of the parent, not the subsidiary's local currency. This is because the parent company is interested in understanding how the project impacts its own financial statements and cash flows.

All of the Following Are Characteristic of the Parent's Perspective