Risk analysis and capital budgeting techniques of U.S. multinational enterprises

Article Abstract:

Foreign subsidiaries of US-based multinational enterprises (MNEs) favor sophisticated capital budgeting techniques as the primary method of analysis, particularly the internal rate of return method. This was gleaned from an examination of the capital budgeting practices used by foreign subsidiaries of US-based MNEs. Findings also show, however, that the actual use of these techniques may not be as widespread as expected. Only those exposed to high levels of political and financial risk revealed a tendency to use these sophisticated strategies. Use of sophisticated risk-adjustment techniques was also not as prevalent as expected.

Capital Budgeting, Risk assessment, Surveys, Capital budgets

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International credit management policies of U.S. subsidiaries

Article Abstract:

Foreign subsidiaries employ credit management policies that are similar to their parent companies. Similarities in credit management policies exist in terms of average discount and collection periods. On the other hand, cash discount rates being offered by foreign subsidiaries are smaller compared to their parent companies. Foreign subsidiary managers utilize theoretically-preferred methods when dealing with credit management issues and cost coefficient collection methods when it comes to past-due account collection.

Credit Management, Analysis, Management, Subsidiary corporations, Subsidiaries

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