TEST BANK
Multinational Business Finance,
16th Edition by David K. Eiteman
Complete Chapter Test Bank
are included (Ch 1 to 18)
** Immediate Download
** Swift Response
** All Chapters included
,Table of Contents are given below
1.Multinational Financial Management: Challenges and Opportunities
2.International Monetary System
3.The Balance of Payments
4.Financial Goals, Corporate Governance and the Market for Corporate
Control
5.The Foreign Exchange Market
6.International Parity Conditions
7.Foreign Currency Derivatives: Futures & Options
8.Interest Rate Risk and Swaps
9.Foreign Exchange Rate Determination & Intervention
10.Transaction Exposure
11.Translation Exposure
12.Operating Exposure
13.Global Cost and Availability of Capital
14.Funding the Multinational Firm
15.Multinational Tax Management
16.International Trade Finance
17.Foreign Direct Investment & Political Risk
18.Multinational Capital Budgeting & Cross-Border Acquisitions
,The test bank is organized in reverse order, with the last chapter displayed first, to ensure that all
chapters are included in this document. (Complete Chapters included Ch18-1)
Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
Chapter 18 Multinational Capital Budgeting and Cross-Border Acquisitions
18.1 Complexities of Budgeting for a Foreign Project
1) The traditional financial analysis applied to foreign or domestic projects, to determine the
project's value to the firm is called:
A) cost of capital analysis.
B) capital budgeting.
C) capital structure analysis.
D) agency theory.
Answer: B
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
2) Which of the following is NOT a basic step in the capital budgeting process?
A) Identify the initial capital invested.
B) Estimate the cash flows to be derived from the project over time.
C) Identify the appropriate interest rate at which to discount future cash flows.
D) All of the above are steps in the capital budgeting process.
Answer: D
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
3) Of the following capital budgeting decision criteria, which does NOT use discounted cash
flows?
A) net present value
B) internal rate of return
C) accounting rate of return
D) All of these techniques typically use discounted cash flows.
Answer: C
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
1
, 4) Which of the following is NOT a reason why capital budgeting for a foreign project is more
complex than for a domestic project?
A) Parent cash flows must be distinguished from project cash flows.
B) Parent firms must specifically recognize remittance of funds due to differing rules and
regulations concerning remittance of cash flows, taxes, and local norms.
C) Differing rates of inflation exist between the foreign and domestic economies.
D) All of the above add complexity to the international capital budgeting process.
Answer: D
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
5) For purposes of international capital budgeting, which of the following statements is NOT
true?
A) Managers must evaluate political risk because political events can drastically reduce the value
or availability of expected cash flows.
B) Parent cash flows must be distinguished from project cash flows. Each of these two types of
flows contributes to a different view of value.
C) An array of nonfinancial payments can generate cash flows from subsidiaries to the parent,
including payment of license fees and payments for imports from the parent.
D) All of the above are true statements.
Answer: D
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
6) Project evaluation from the ________ viewpoint serves some useful purposes and/but should
________ the ________ viewpoint.
A) local; be subordinated to; parent's
B) local; not be subordinated to; parent's
C) parent's; be subordinated to; local
D) none of the above
Answer: A
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
2
Multinational Business Finance,
16th Edition by David K. Eiteman
Complete Chapter Test Bank
are included (Ch 1 to 18)
** Immediate Download
** Swift Response
** All Chapters included
,Table of Contents are given below
1.Multinational Financial Management: Challenges and Opportunities
2.International Monetary System
3.The Balance of Payments
4.Financial Goals, Corporate Governance and the Market for Corporate
Control
5.The Foreign Exchange Market
6.International Parity Conditions
7.Foreign Currency Derivatives: Futures & Options
8.Interest Rate Risk and Swaps
9.Foreign Exchange Rate Determination & Intervention
10.Transaction Exposure
11.Translation Exposure
12.Operating Exposure
13.Global Cost and Availability of Capital
14.Funding the Multinational Firm
15.Multinational Tax Management
16.International Trade Finance
17.Foreign Direct Investment & Political Risk
18.Multinational Capital Budgeting & Cross-Border Acquisitions
,The test bank is organized in reverse order, with the last chapter displayed first, to ensure that all
chapters are included in this document. (Complete Chapters included Ch18-1)
Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
Chapter 18 Multinational Capital Budgeting and Cross-Border Acquisitions
18.1 Complexities of Budgeting for a Foreign Project
1) The traditional financial analysis applied to foreign or domestic projects, to determine the
project's value to the firm is called:
A) cost of capital analysis.
B) capital budgeting.
C) capital structure analysis.
D) agency theory.
Answer: B
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
2) Which of the following is NOT a basic step in the capital budgeting process?
A) Identify the initial capital invested.
B) Estimate the cash flows to be derived from the project over time.
C) Identify the appropriate interest rate at which to discount future cash flows.
D) All of the above are steps in the capital budgeting process.
Answer: D
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
3) Of the following capital budgeting decision criteria, which does NOT use discounted cash
flows?
A) net present value
B) internal rate of return
C) accounting rate of return
D) All of these techniques typically use discounted cash flows.
Answer: C
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
1
, 4) Which of the following is NOT a reason why capital budgeting for a foreign project is more
complex than for a domestic project?
A) Parent cash flows must be distinguished from project cash flows.
B) Parent firms must specifically recognize remittance of funds due to differing rules and
regulations concerning remittance of cash flows, taxes, and local norms.
C) Differing rates of inflation exist between the foreign and domestic economies.
D) All of the above add complexity to the international capital budgeting process.
Answer: D
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
5) For purposes of international capital budgeting, which of the following statements is NOT
true?
A) Managers must evaluate political risk because political events can drastically reduce the value
or availability of expected cash flows.
B) Parent cash flows must be distinguished from project cash flows. Each of these two types of
flows contributes to a different view of value.
C) An array of nonfinancial payments can generate cash flows from subsidiaries to the parent,
including payment of license fees and payments for imports from the parent.
D) All of the above are true statements.
Answer: D
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
6) Project evaluation from the ________ viewpoint serves some useful purposes and/but should
________ the ________ viewpoint.
A) local; be subordinated to; parent's
B) local; not be subordinated to; parent's
C) parent's; be subordinated to; local
D) none of the above
Answer: A
Diff: 2
L.O.: 18.1 Complexities of Budgeting For a Foreign Project
Skill: Recognition
AACSB: Application of knowledge
2
