Country Risk and Making Financial Decisions Worksheet


Objectives and Learning Outcomes:

Country risk represents the potentially adverse impact of a country’s environment on a multinational corporation (MNC)’s cash flows. An MNC conducts country risk analysis when it applies capital budgeting to determine whether to implement a new project or whether to continue conducting business in a particular country. This project helps you understand how to measure country risk and incorporate country risk to achieve the maximization of firm value.


Read Chapter 16 and course slides carefully and make a “one-page single-spaced report.” Make sure that your report includes the detailed discussion of the following subjects.

  • Explain how MNCs use the assessment of country risk when making financial decisions.