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Which One of the Following Is Advised When Evaluating a Capital

Question 59

Multiple Choice

Which one of the following is advised when evaluating a capital project in a foreign country if you are concerned about political risk?


A) The project should be abandoned until this risk disappears.
B) The project's cost of capital rate should be decreased to offset the perceived risk.
C) The domestic discount rate should be increased to account for the added risk.
D) The project cash flows should be decreased to recognize the possibility of bad outcomes.

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