Political instability and currency conversion are reasons why ________ is more complicated for foreign subsidiaries than domestic ones.
A) Currency lagging
B) Capital budgeting
C) Patterning cash flows
D) Forward financing

Question

Quizplus · Accepted Answer

Political instability and currency conversion can create uncertainty and risk in predicting future cash flows for foreign subsidiaries. This makes it more challenging to accurately conduct capital budgeting, which involves evaluating long-term investment decisions based on expected cash inflows and outflows. Currency lagging, patterning cash flows, and forward financing are also potential challenges for foreign subsidiaries, but they are not directly related to capital budgeting.

Political Instability and Currency Conversion Are Reasons Why ________ Is