1Adjusted Present Value (APV)
A present value technique that discounts a firm's cash flows at different rates depending on the risk of the cash flows.
2All-Equity Cost of Capital
The required return on a company's stock in the absence of debts.
3All-Equity Cost of Equity
The cost of equity for a firm financed only with equity.
4Borrowing Capacity
Refers to the ability to borrow the amount of money from a lender. The capacity may vary as per their particular situations.
5Concessionary Loan
A loan below the market interest rate offered by the host coutnry to a parent MNC to encourage capital expenditures in the host country.
6Incremental Cash Flow
Refers to cash flow that a company acquires when it takes on a new project.
7Lost Sales
The cannibalization of existing projects by new projects and the entire sales revenue of a new foreign manufacturing facility representing the incremental sales revenue of the new project.
8Net Present Value (NPV)
A capital budgeting method in which the present value of cash outflows is subtracted from the present value of expected future cash inflows to determine the ___ of an investment project.
9Real Option
The application of options pricing theory to the evaluation of investment options in real projects.
10Restricted Funds
Funds whose use is restricted by exchange controls or funds on which additional taxes would be due in the parent coutnry if they were remitted.
11Value-Additivity
Each cash flow that is a source of value is considered individually.