What additional complexities arise when multinational corporations con

What additional complexities arise when multinational corporations consider capital projects on a global basis?

What will be an ideal response?

ANSWER

Considerations must be given to the impact on projected cash flows from differences in tax laws and tax rates, exchange rate controls and changes, limitations on repatriation of profits, tariffs and quotas on imported products, and special licensing fees. In addition, rates used to discount cash flows back to present values must be adjusted for differences in rates of inflation and taxes, and risks associated with expropriation of assets and political-social instability.