One method of analyzing a foreign investment opportunity is to treat all risk as a single problem by adjusting the discount rate applicable.For countries with significant political and economic risks,the:

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When analyzing a foreign investment opportunity, countries with significant political and economic risks have their discount rates revised upward. This is because higher risk demands a higher return, and adjusting the discount rate upward reflects the increased risk. Other adjustments may also be necessary, such as adjusting the cash flows to reflect any uncertainties or penalties associated with the investment. However, early cash flows are not adjusted differently from distant cash flows, as the discount rate accounts for the time value of money.

One Method of Analyzing a Foreign Investment Opportunity Is to Treat