Which of the Following Is an External Economic Relations Factor

question 69

Multiple Choice

Which of the following is an external economic relations factor that multinational companies may use to evaluate political risk?

• A) Per capita income
• B) Inflation during the previous two years
• C) Traffic system and communication
• D) Freedom to set up or engage in partnerships

---

Definitions:

Internal Rate of Return

The discount rate that makes the net present value (NPV) of all cash flows (both positive and negative) from a particular project or investment equal to zero.

Required Return

The smallest percentage of annual gain required from an investment to attract individuals or corporations to fund a certain project or venture.

Wealth

The abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions.

Discounted Payback

The period of time it takes for the sum of the discounted cash flows to pay back the initial investment.