For international investments, relative to project cash flows, parent cash flows are often dependent on the form of financing.

Question

Quizplus · Accepted Answer

Parent cash flows for international investments can be influenced by the form of financing used for the project. For example, if a subsidiary is financed through debt, the parent company may receive interest payments that affect its cash flows. Similarly, if equity financing is used, the parent may receive dividends or capital gains that also impact its cash flows. Thus, the choice of financing can impact how much cash flows the parent receives from the international investment.

For International Investments, Relative to Project Cash Flows, Parent Cash