When an MNC analyzes the feasibility of a project, it should consider the:
A)variability of the project's cash flow.
B)correlation of the project's cash flow relative to the prevailing cash flows of the MNC.
C)A and B
D)none of the above

Question

Quizplus · Accepted Answer

Both A and B are important factors that an MNC must consider when analyzing the feasibility of a project. The variability of the project's cash flow is important because if the cash flows are too uncertain, it may not be worth pursuing the project due to the higher risk involved. The correlation of the project's cash flow relative to the prevailing cash flows of the MNC is important because the MNC wants to ensure that the project aligns with its overall strategy and does not introduce significant risks or negative impacts to its existing operations. Therefore, both factors must be carefully analyzed and considered together to determine the feasibility of the project.

When an MNC Analyzes the Feasibility of a Project, It