There are several risks associated with operating a multinational corporation. Any company doing business in a foreign country has to consider political or country risks. Especially if the target country has a relatively unstable political environment, financial managers must incorporate the potential risk into the cost of the project.
Discuss the following statements/questions:
- Given the risks associated with an MNC, discuss why a firm would choose to operate as an MNC.
- Describe political risk on a macro and micro level and provide examples of each.
- Why is the repatriation of cash flows from an overseas project considered critical?