Repatriation of funds is not relevant in multinational capital budgeting analysis as the funds generated in foreign countries can be reinvested in that country generating larger cash flows for the parent company.

Question

Quizplus · Accepted Answer

Repatriation of funds is a crucial factor to consider in multinational capital budgeting analysis as it involves transferring profits earned by the foreign subsidiary back to the parent company's home country. This process can involve significant costs like taxes and exchange rate fluctuations which may affect the potential cash flows and returns of the investment. Therefore, repatriation of funds needs to be taken into account while evaluating the viability of a multinational investment project.

Repatriation of Funds Is Not Relevant in Multinational Capital Budgeting