Explain the characteristics of capital budgeting for multinationals. Why a foreign project should be evaluated both from a project and parent view point.

Capital budgeting is the process of evaluating and selecting long-term investment opportunities that involve significant outlays of capital. For multinationals, capital budgeting decisions are more complex due to various factors such as differences in legal, regulatory, and tax environments, exchange rate risk, and political risk. Here are some characteristics of capital budgeting for multinationals:

1. Cross-border investments: Multinationals invest in projects in different countries, each with its own unique economic, legal, and regulatory environment. As a result, capital budgeting for multinationals requires an understanding of the various risks and challenges associated with cross-border investments.

2. Exchange rate risk: Multinationals face currency risk when __________ _______ ________ ___ _____ _________ ___ _________ ______ ___ ____ __________.
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