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.

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Definitions:

ISO 9000

The set of standards that certifies that a business is using processes and principles to ensure the production of quality products.

Six Sigma

The tolerance range in which only 3.4 defects per million are allowed.

Defects

Imperfections or faults in a product or process that can result in a failure to meet desired quality standards.

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A guideline or procedure used to decide the order in which jobs, tasks, or items are processed or addressed.