Although an MNC can adjust either the discount rate or the cash flows to account for a project's risk,there is no perfect formula to adjust for a project's unique risk.

Question

Quizplus · Accepted Answer

While adjusting the discount rate or cash flows can account for some of the risk, there is no one-size-fits-all formula to perfectly adjust for each project's unique risk factors. Companies must use their own judgment and analysis to determine the appropriate adjustments for each individual project.

Although an MNC Can Adjust Either the Discount Rate or the Cash