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.
Correct Answer:
Verified
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