If countries are highly influential upon each other, the correlations of their economic growth levels would likely be ____. A firm would benefit ____ by diversifying sales among these countries relative to another set of countries that were not influential upon each other.
Assume the correlation coefficient between the returns on the existing project and the return on a proposed foreign project is 1. Also assume the returns on existing project and the new project are equal, and that the existing project has a lower standard deviation than the proposed project. Under this scenario, undertaking the proposed project will ____ the variance of the firm's overall returns.
The following data is available for an investment object: Acquisition cost: 60,000
Operating cash flows: 20,000 in year 1; 30,000 in year 2; 35,000 in year 3.
Using the NPV model with a discount rate of 10%, which of the following is true?