Question

When an MNC needs to finance a portion of a foreign project within the foreign country, the best method to account for a foreign project's risk is to:
a. derive the net present value of the equity investment.
b. apply a required return based on unsystematic risk.
c. apply the required return equal to the risk-free rate in the foreign country.
d. apply a required return that is based on the CAPM.

Answer 1

Answer: A

Explanation:

derive the net present value of the equity investment.