The risk exhibited by a firm, and an asset, if it was the only asset in the firm

Question

The risk exhibited by a firm, and an asset, if it was the only asset in the firm's portfolio. The risk inherent in multinational capital spending that a foreign government will restrict the cash flow to the parent company. Political risk The cash flows that an asset or project is expected to generate over its life and that are relevant to a capital budgeting analysis. Stand-alone risk This cash flow occurs at the end of the life of the project, and it reflects only cash flows that occur at the end of the project's life. Incremental cash A cost that has been incurred and may be related to a project but should flows not be part of the decision to accept or reject a project.

Explanation / Answer

1) Terminal Cash Flow---D

2) Sunk Cost-E

3) Political Risk-B

4) Stand-Alone Risk-A

5)Incremental Cash flow-C

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