The primary purpose of country risk analysis when applied to capital budgeting is usually to measure the effect of country risk on:

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The primary purpose of country risk analysis when applied to capital budgeting is usually to measure the effect of country risk on cash flows. This is because country risk can impact a company's ability to generate cash flows, which affects its ability to finance capital investments and pay dividends to shareholders. Country risk can include factors such as political stability, currency exchange rates, and economic conditions, all of which can impact cash flows. Therefore, analyzing country risk is an important part of capital budgeting decision-making.

The Primary Purpose of Country Risk Analysis When Applied to Capital