Reference no: EM132613235

Which of the following choices is most accurate regarding the following statements about capital budgeting in a multinational environment:

Statement 1: Cash flows must be adjusted prior to discounting to account for projected exchange rates and tax impacts

Statement 2: The firm should always utilize the company's existing WACC as the discount rate

Statement 3: When determining the proper discount rate, the firm should consider all risk factors associated with the project, including exchange rate risk and political risk

A. Only Statement 1 is true

B. Only Statement 2 is true

C. Only Statement 3 is true

D. Only Statements 1 and 2 are true

E. Only Statements 1 and 3 are true

F. Only Statements 2 and 3 are true

G. Statements 1, 2, and 3 are all true

H. Statements 1, 2, and 3 are all false