When Determining Whether a Particular Proposed Project in a Foreign

question 33

Multiple Choice

When determining whether a particular proposed project in a foreign country is feasible:

• A) a country risk rating can adequately substitute for a capital budgeting analysis.
• B) country risk analysis should be incorporated within the capital budgeting analysis.
• C) the effect of country risk on sales revenue is more important than the effect on cash flows.
• D) the project with the highest country risk rating (lowest country risk) should be accepted.
• E) B and D

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Definitions:

Sustainable Competitive Advantage

A unique advantage that allows an organization to outperform its competitors over a long period.

Socially Responsible Organizations

Companies that operate in a manner that considers the social, environmental, and economic impacts of their decisions and actions.

Investors

Individuals or entities that commit capital with the expectation of receiving financial returns, involving a variety of investment vehicles like stocks, bonds, and real estate.

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Individuals or groups that have an interest or concern in an organization's activities and outcomes, including employees, customers, suppliers, and shareholders.