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The Foreign Currency Approach to Capital Budgeting Analysis

Question 34

Multiple Choice

The foreign currency approach to capital budgeting analysis


A) is computationally harder to use than the home currency approach.
B) produces different results than the home currency approach.
C) computes the NPV of a project in both the foreign and the domestic currency.
D) relies on the international Fisher effect for the exchange rate.
E) relies on the uncovered interest rate parity to project multiple exchange rates.

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