Question

Would a US based MNC have to do a country risk analysis of a US project?...

Would a US based MNC have to do a country risk analysis of a US project? Why or why not?

Homework Answers

Answer #1

Even a US based MNC should perform a country risk analysis of a US project.this is because there may be many factors which have not been considered or studied by the management. There may be various risks in the form of financial and political risks which need to be taken into account. The MNC should study the financial risks that can impact its profitability such as changes in the demand and trends which impact the profitability of the business. These are required to be analysed thoroughly even if the MNC is US based.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A US based MNC plans to invest in a new project EITHER in US or in...
A US based MNC plans to invest in a new project EITHER in US or in Mexico. The new project is expected to take up a quarter of the firm’s total investment fund. The balance of the corporation’s investment is exclusively in an existing US project. The features of the proposed new project are as follows:                                                           Existing US project   US project (new)   Mexico project (new) Expected rate of return E(R)                10%                              15%                          15% Standard deviation of E(R)                0.10                                  0.11                         ...
Today US based MNC is selling its product to one company in Germany with the payment...
Today US based MNC is selling its product to one company in Germany with the payment of euro 2 million in 90 days. Today’s sport rate is $1.30/euro. • What is a risk factor of US based MNC? • If 90 day forward rate in euro is $1.34/euro, how the US MNC avoids the FX rate risk? • Does the US MNC have a forward gain or loss?
X Co., is a U.S.-based MNC that needs funding for a project in Russia: U.S. risk-free...
X Co., is a U.S.-based MNC that needs funding for a project in Russia: U.S. risk-free rate = 6 % Russia risk-free rate = 6 % Risk premium on dollar-denominated debt provided by U.S. creditors = 4 % Risk premium on euro-denominated debt provided by Russian creditors = 5 % Beta of the venture = 1.2 Expected market return in the U.S. = 10% U.S. corporate tax rate = 30% Russian corporate tax rate = 40% In what country should...
To mitigate country risk, an MNC can ____________ . i) shorten the minimum payback period ii)...
To mitigate country risk, an MNC can ____________ . i) shorten the minimum payback period ii) increase the hurdle rate iii) adjust operating cash flows iv) choose equity financing over debt financing Group of answer choices i and iii , ,i ,i, ii, and iii All of the above strategies work to mitigate country risk
Develop a term paper on Country Risk Analysis with the following format: 1.1 Introduction 1.2 Country...
Develop a term paper on Country Risk Analysis with the following format: 1.1 Introduction 1.2 Country Risk analysis 1.3 Conclusions and Recommendations References Contents should include but not limited to: importance of country risk analysis, types of country risk assessment, political and financial risk factors, and techniques to assess country risk.
What is meant by country risk analysis
What is meant by country risk analysis
2. a. Company Ziyu. is a U.S. based MNC with net cash inflows of euros and...
2. a. Company Ziyu. is a U.S. based MNC with net cash inflows of euros and net cash inflows of Swiss francs. These two currencies are highly correlated in their movements against the dollar. Kang Co. is a U.S. based MNC that has the same level of net cash flows in these currencies as Ziyu Co. except that its euros represent net cash outflows. Which firm has a higher exposure to exchange rate risk? Why? b. Stephanie Olive Co. is...
Should an MNC Risk Overhedging? POINT: Yes. MNCs have some “unanticipated” transactions that occur without any...
Should an MNC Risk Overhedging? POINT: Yes. MNCs have some “unanticipated” transactions that occur without any advance notice. They should attempt to forecast the net cash flows in each currency due to unanticipated transactions based on the previous net cash flows for that currency in a previous period. Even though it would be impossible to forecast the volume of these unanticipated transactions per day, it may be possible to forecast the volume on a monthly basis. For example, if an...
POINT/COUNTER-POINT: Should an MNC Risk Overhedging? POINT: Yes. MNCs have some “unanticipated” transactions that occur without...
POINT/COUNTER-POINT: Should an MNC Risk Overhedging? POINT: Yes. MNCs have some “unanticipated” transactions that occur without any advance notice. They should attempt to forecast the net cash flows in each currency due to unanticipated transactions based on the previous net cash flows for that currency in a previous period. Even though it would be impossible to forecast the volume of these unanticipated transactions per day, it may be possible to forecast the volume on a monthly basis. For example, if...
Chapter 1 Running Your Own MNC Developing Your Idea Create an idea for your own MNC...
Chapter 1 Running Your Own MNC Developing Your Idea Create an idea for your own MNC to conduct international business. Your idea should be simplified to the degree that you could possibly implement it someday. However, your idea should also be sufficiently creative to be successful if done properly. Your idea should focus on one country and one foreign currency, since many MNCs are focused in this manner when they are first created. So that you can recognize the issues...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT