How licensing royalties fees affect value of foreign project

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1. Can an investment project of a foreign subsidiary that has a positive net present value when evaluated as a stand-alone firm ever be rejected by the parent corporation? Assume that the parent accepts all projects with positive adjusted net present values.

2. How do licensing agreements, royalties, and overhead allocation fees affect the value of a foreign project?

3. Why does an adjusted net present value analysis treat the present value of financial side effects as a separate item? Isn't interest expense a legitimate cost of doing business?

Reference no: EM13897638

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