Westonci.ca is the Q&A platform that connects you with experts who provide accurate and detailed answers. Discover detailed solutions to your questions from a wide network of experts on our comprehensive Q&A platform. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

Accounting for Changes in Risk. Santa Monica Co., a U.S.-based MNC, was considering establishing a consumer products division in Germany, which would be financed by German banks. Santa Monica completed its capital budgeting analysis in August. Then, in November, the government leadership stabilized and political conditions improved in Germany. In response, Santa Monica increased its expected cash flows by 20
percent but did not adjust the discount rate applied to the project. Should the discount rate be affected by the change in political conditions?

Sagot :

Thanks for stopping by. We are committed to providing the best answers for all your questions. See you again soon. We appreciate your time. Please come back anytime for the latest information and answers to your questions. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.