Question

1. Project valuation
   1. Allows you to decide whether or not a foreign project is positive NPV to the home firm
   2. Allows you to decide if there are better investment opportunities available in the target country
   3. Involves discounting USD cash flows at the subsidiary’s cost of capital
   4. Involves discounting foreign currency cash flows at the home firm’s cost of capital

Answer 1

Project valuation of international projects are associated with deciding upon whether or not a foreign project is a positive net present value to the home firm.

Rest of the statement is false because it is discounted with the International firm's cost of capital and it does not involve discounting dollar cash flows at the subsidiary cost of capital and it does not gives any idea about other investment opportunity.

So the correct answer would be option ( a)Allows you to decide whether or not a foreign project is positive NPV to the home firm.