Foreign capital budgeting may require adjustments for additional risks and uncertainties that are unique to the foreign location. However, the theoretical framework for evaluating foreign projects is essentially the same as for domestic projects.

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Capital Budgeting

Question 45

Multiple Choice

Capital budgeting:

A) in practice is a very simple and perfect process.
B) techniques are not useful for quantifying the benefits,costs,and risks of an investment.
C) for a foreign project uses the same theoretical framework that domestic capital budgeting uses.
D) techniques,for evaluating potential foreign projects,do not require the firm to recognize the specific risks arising from its foreign location.

Correct Answer: