What is a drawback of using the given approach

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Reference no: EM13935675

Impact of reinvested foreign earnings on NPV. Greet BV is a Dutch-based firm with a subsidiary in Mexico. It plans to reinvest its earnings in Mexican government securities for the next ten years since the interest rate earned on these securities is so high. Then, after ten years, it will remit all accumulated earnings to the Netherlands. What is a drawback of using this approach? (Assume the securities have no default or interest rate risk.)

Reference no: EM13935675

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