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Regarding the project and risks noted above, which of the following is LEAST true? Use the following to answer questions 9 - 11 RST Corp
Regarding the project and risks noted above, which of the following is LEAST true?
Use the following to answer questions 9 - 11 RST Corp plans to expand its business into Canada. However, it is concerned with two independent types of Country Risk in the next year: a 15% chance that the Canadian government will impose a special tax on funds remitted to the parent company a 15% chance that the Canadian government will force a sale of the subsidiary to a local company Question 11 5 pts Regarding the project and risks noted above, which of the following is LEAST true? The special tax, if it occurs, will certainly lower the NPV of the project In assessing the expected NPV of the project, a near term exchange rate forecast would be useful The specific amount of the special tax should be reflected in any prediction of expected NPV The forced sale, if it occurs, will certainly lower the NPV of the project
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