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International Financial Management by Thummuluri Siddaiah

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Chapter 9

Cross-border Investment Decisions

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

  • Discuss the importance of cross-border investment.

  • Understand the concept of capital budgeting and analyse the factors considered during cash-flow estimation.

  • Distinguish between foreign projects and domestic projects in terms of cash flows.

  • Discuss the approaches to project evaluation and highlight the difference between the net present value (NPV) approach and the adjusted present value (APV) approach.

  • Gain insight into the risks involved in cross-border investments.

  • Define various risk-handling techniques.

  • Understand the concept of real options.

9.1 Introduction

Business firms can enter foreign markets through exports, license ...

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