Which of the Following Is Probably the Best Method of Incorporating

question 22

Multiple Choice

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.

---

Definitions:

Herzberg

Refers to Frederick Herzberg, a psychologist known for his Two-Factor Theory of motivation and job satisfaction.

Recognition

The process or action of identifying something or someone as having been previously seen, known, or experienced.

Security

Measures and protocols implemented to protect individuals, data, and assets from theft, attacks, or other threats.

Lower-Level Needs

Refers to the foundational physiological and safety needs in Maslow's hierarchy that must be satisfied before an individual can focus on higher-level psychological needs.