If a foreign project is owned by a domestic corporation, managers and shareholders need to determine the home currency value of the foreign currency cash flows.

Question

Quizplus · Accepted Answer

When a domestic corporation owns a foreign project, the cash flows generated in foreign currency need to be converted to the home currency for reporting and analysis purposes. This requires determining the exchange rate between the foreign currency and the home currency to calculate the home currency value of the cash flows.

If a Foreign Project Is Owned by a Domestic Corporation