Abstract

The financial objective of U.S. corporate investments in developing countries such as Korea—as this article reveals—is to make enough cash flows on a discounted basis. The cash flow is in turn affected by the following factors: the rapatriation rate, tax incentives and credit, local labor cost, the relative cost of capital, the capital structure, tariff concessions, devaluation, and inflation. Nonfinancial factors—political, social, and cultural—are also integrated in foreign investment decision making.

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