One way cash flows from foreign projects can be forecast is to forecast the future foreign currency cash flows,discount them to the present using an appropriate foreign currency discount rate,and then multiply the present value denominated in the foreign currency by the current ________ between the two currencies.

Question

Quizplus · Accepted Answer

The correct method for converting the present value of future foreign currency cash flows into the home currency is to use the home currency spot exchange rate. This rate reflects the current exchange value of the home currency relative to the foreign currency, providing an accurate conversion for the present value calculations.

One Way Cash Flows from Foreign Projects Can Be Forecast