When Quantifying Country Risk

question 51

Multiple Choice

When quantifying country risk:

• A) weights should be equally allocated among factors.
• B) weights should be assigned to the political and financial factors according to their perceived importance.
• C) it is not generally necessary to construct separate ratings for political and financial risk since these will be equally weighed in the final analysis.
• D) the derived factors will be identical for all MNCs conducting business in that country.

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Definitions:

Salvage Value

The estimated concluding value of an asset at the expiration of its functional life.

Simple Rate Of Return

A calculation that measures the profitability of an investment as the annual incremental net operating income divided by the initial investment cost.

Sales Revenues

The total amount of money generated from the sale of goods or services by a company before any costs or expenses are subtracted.

Cash Operating Expenses

Expenses that a company pays in cash during an accounting period, excluding non-cash expenses such as depreciation.