Question
A large oil company is looking at capitalizing on a large oil reserve that has been discovered in a foreign country. The capital project to
A large oil company is looking at capitalizing on a large oil reserve that has been discovered in a foreign country. The capital project to extract this oil would involve many risks and uncertainties for the company. Which of the following is not an effective means of mitigating the risk prior to initiating a capital project?
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Prepare a detailed scenario analysis.
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Insert real elements into the discounted cashflow analysis of the project.
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Consider a joint venture with a local company.
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Offer monetary compensation to those in political power to ensure access.
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Insert real elements into the discounted cashflow analysis of the project.
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