Since the cash flows generated by a foreign target will eventually be converted to the parent's currency, there is no need to consider the foreign exchange rate in the capital budgeting process.

Question

Quizplus · Accepted Answer

The foreign exchange rate should be considered in the capital budgeting process because the value of the cash flows generated by a foreign target can be affected by exchange rate fluctuations when they are converted to the parent's currency. This can impact the net present value and profitability of the project.

Since the Cash Flows Generated by a Foreign Target Will