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The Foreign Currency Approach to Capital Budgeting Analysis

Question 59

Multiple Choice
The foreign currency approach to capital budgeting analysis:

The foreign currency approach to capital budgeting analysis:


A) produces different results than the home currency approach.
B) is computationally harder to use than the home currency approach.
C) computes the NPV of a project in both the foreign and the domestic currency.
D) requires an exchange rate for each time period for which there is a cash flow.
E) converts all foreign cash flows into dollar cash flows.

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