There are several risks associated with operating a multinational corporation. Any company doing business in a foreign country has to consider…

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:

  1. Given the risks associated with an MNC, discuss why a firm would choose to operate as an MNC.
  2. Describe political risk on a macro and micro level and provide examples of each.
  3. Why is the repatriation of cash flows from an overseas project considered critical?

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