How can a multinational enterprise incorporate its perception of high level of risk into its capital budgeting process?

Question

Quizplus · Accepted Answer

All of the options provided are methods through which a multinational enterprise can incorporate a high level of perceived risk into its capital budgeting process. Conservative estimates of cash inflows and liberal estimates of expected cash outflows both err on the side of caution, reflecting a risk-averse approach. A high discount rate directly accounts for the higher risk by reducing the present value of future cash flows, making it harder for projects to meet investment criteria.

How Can a Multinational Enterprise Incorporate Its Perception of High