Which of the following is probably the best method of incorporating country risk into a capital budgeting analysis?
A) Adjusting the discount rate upward
B) Adjusting the input variables to estimate the sensitivity of the project's NPV
C) Adjusting the political risk rating to obtain a more favorable NPV
D) Country risk should be ignored in capital budgeting, since it is a subjective analysis.
Correct Answer:
Verified
Q40: When quantifying country risk:
A) weights should be
Q41: Country risk analysis is important because it:
A)
Q42: The weights assigned to factors when assessing
Q43: To reduce the exposure to a host
Q44: When using a checklist approach to assess
Q46: U.S.-based MNCs could avoid country risk by
Q47: Delphi analysis examines the financial and political
Q48: Macro-assessment of country risk refers to an
Q49: A micro-assessment of country risk involves consideration
Q50: If an MNC diversifies its operations internationally
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