
332 INTERNATIONAL FINANCIAL MANAGEMENT
return (IRR) of the project. Only those cash flows that are remittable to the parent unit
of the MNC are relevant when the project is appraised from the parent firm’s perspec-
tive. Further, the MNC may consider the likely blocked funds in arranging finances
for the project. For example, an MNC may decide to finance a project by mobilizing a
certain proportion of needed funds in the host country itself, so that the funds do not
need to be repatriated to the parent firm.
Blocked funds can also be effectively deployed in the host country itself. For
example, such funds can be reinvested in the subsidiary fir ...