9. The process of sending cash flows from a foreign subsidiary back to the paren

Question

9. The process of sending cash flows from a foreign subsidiary back to the parent company is known as a. net present value analysis b. Monte Carlo simulation c. pure play method d. capital allocation e. repatriation of earnings 10. Ziker Golf Company evaluated a project as a risky project. Ziker generally evaluates projects that are riskier than average by adjusting its required rate of return by 4 percent. If Ziker expects 12% return on average risk projects, then it should expect a return of for a risky project. a. 8% b. 12% C. 16% d. 10% e. 48%

Explanation / Answer

9 Ans: E i.e Repatriation of earnings.

This method of practice usually follwed by Multinational filrms,to get their investment which is invested in their foreign subsidiary back from host counrty from forien subsidiary. this involves high risk of exchange rate fluctuations and political risk also invovled.

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