An MNC's parent would consider investing in a target only if the estimated present value of the cash flows it would ultimately receive from the target over time ____ the initial outlay necessary to purchase the target.

Question

Quizplus · Accepted Answer

An MNC's parent would want the estimated present value of the cash flows it would receive over time from the target to be greater than the initial outlay necessary to purchase the target. This is because the MNC is investing in the target to make a profit, and if the cash inflows are not greater than the outflows, the investment would not be profitable.

An MNC's Parent Would Consider Investing in a Target Only