Fluctuating currency exchange rates should be ignored in capital budgeting because for a U.S.firm,all incremental cash flows will be properly measured in dollars.

Question

Quizplus · Accepted Answer

Fluctuating currency exchange rates should not be ignored in capital budgeting because they can significantly impact the value of future cash flows when they are converted to the firm's home currency, affecting the project's overall valuation and risk.

Fluctuating Currency Exchange Rates Should Be Ignored in Capital Budgeting