10. Which of the following is NOT a basic step in the domestie project valuation

Question

10. Which of the following is NOT a basic step in the domestie project valuation process? A) Identify the initial capital invested. over time B) Estimate the cash flows to be derived from the project C) Identify the appropriate interest rate at which to discount future cash flows. entify and incorporate political/foreign risk into the valuation model E) All of the above are steps in the domestic project valuation process. 11. Which of the following is NOT a form of FDI? A) wholly-owned affiliate in a foreign country B) joint venture C) importing goods D) Greenfield investment E) all of the above are forms of FDI 12. Which of the following is/are NOT a/an advantage to a joint venture? A) The local partner's reputation enhances access to local financial markets. B) The local partner might take advantage of proprietary information. C) The local partner understands the customs and mores of the foreign market. D) The local partner's public image may enhance local sales. 13. Cyber attacks, and the anti-globalization movement are each examples of risks. A) firm-specific B) country-specific C) institutional D) global-specifie is the risk that a foreign government will place restrictions such as limiting the 14. amount of funds that can be remitted to the parent firm, or even expropriation of cash flows earned in that country A) Exchange risk B) Foreign risk C) Political risk D) Unnecessary risk

Explanation / Answer

The correct answers are as below:

10. D) Identify and incorporate political/foreign risk in the valuation model

11. C) Importing goods

12. B) The local partner may take advantage of proprietary information

13. D) Global specific risk

14 C) Political risk

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