Calculate the political risks rating

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Reference no: EM132807284

Centana Inc. would like to assess the country risk of a foreign country.

Centana has identified various political and financial risk factors, as shown below.

Political Risk Factor Assigned Rating Assigned Weight

Blockage of fund transfers 4 30%

Bureaucracy 1 70%

Financial Risk Factor Assigned Rating Assigned Weight

Interest rate 2 20%

Inflation 5 10%

Exchange rate 5 30%

Competition 3 20%

Growth 5 20%

Centana has assigned an overall rating of 70 percent to political risk factors and of 30 percent to financial risk factors. Centana is not willing to consider the foreign company for investment if the country risk rating is less than 2.0.

(1) Calculate the political risks rating;

(2) Calculate the financial risk rating;

(3) Calculate the weighted rating for the foreign company;

(4) Should Centana consider the investment?

Reference no: EM132807284

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