Consider the point and counter-point arguments

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Reference no: EM131011779

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.

Reference no: EM131011779

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