Consider the following point and counter-point arguments, Ask an Expert

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Consider the following point and counter-point arguments. Which argument to you support? Explain why and offer your own opinion on the issue.

Point: Country risk does not matter for U.S. projects. U.S.-based MNCs should consider country risk for foreign projects only. A U.S.-based MNC can account for U.S. economic conditions when estimating cash flows of a U.S. project or deriving the required rate of return on a project, but it does not need to consider country risk.

Counter-Point: Country risk does matter for U.S. projects. Country risk should be considered for U.S. projects. Country risk can indirectly affect the cash flows of a U.S. project. Consider a U.S. project in which supplies are produced and sent to a U.S. exporter. The demand for the supplies will be dependent on the demand for the exports over time, and the demand for exports over time may be dependent on country risk.

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Financial Management, Finance

Category:- Financial Management
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