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If a company is thinking about investment in a foreign operation, the NPV is computed as follows :

a. Convert all cash flows to home currency using spot exchange rate and then apply home currency discount rate. b. Apply discount rate in foreign currency to the cash flows in foreign currency. Apply spot exchange rate to the resultant NPV to compute NPV in home currency. c. Any one of the above.

Financial Management
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Date Posted: 2014/08/10
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Kamran Anjum
by Kamran Anjum , Head of Internal Audit , Rafhan Maize Products Company limited, Faisalabad, Pakistan, Ingredion Incorporated Gmbh

Option (C) Any one of the above.

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