P4小册子-8.pdf

8: International investment decisions Topic List Companies that undertake overseas projects are subject to exchange rate risks as well as other risks such as exchange controls, taxation and political action. NPV and international projects Capital budgeting methods for multinational companies can incorporate these additional complexities in the Exchange controls decision-making process. Exchange rate risks Capital structure NPV and Exchange Exchange Capital international projects controls rate risks structure Purchasing power parity NPVs for international Absolute purchasing parity theory: prices of products in different projects countries will be the same when expressed in the same currency. Alternative methods for Alternative purchasing power parity relationship: changes in calculating the NPV from a exchange rates are due to differences in the expected inflation rates overseas project: between countries. Convert project cash flows International Fisher effect into sterling and discount at sterli