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 United States.
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

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 United States.
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.

Quizplus · Accepted Answer

If the currency of the host country is expected to depreciate consistently, the subsidiary administering the project may find it more difficult to maintain profitability or generate the expected return on investment. This can lead to a discrepancy between the perspectives of the U.S. parent company and the subsidiary. The other options (taxes and blocked fund restrictions) do not necessarily affect the feasibility of a project in the same way.

The Discrepancy Between the Feasibility of a Project in a Host