The discrepancy between the feasibility of a project in a host country from the perspective of the U.S. parent versus the subsidiary administering the project is likely to be greater for projects in countries where:
A) the taxes are the same as in the U.S.
B) there are no blocked fund restrictions.
C) the currency of the host country is expected to depreciate consistently.
D) none of the above; a discrepancy is not possible.

Question

Quizplus · Accepted Answer

When the currency of the host country is expected to consistently depreciate, it may make the project less feasible from the perspective of the U.S. parent as it could lead to a reduction in profits when the earnings are converted back into the parent's currency. However, the subsidiary may view the project as feasible as they are likely to operate and earn profits in the local currency.

The Discrepancy Between the Feasibility of a Project in a Host