Responses to Risk

Colin White and Miao Fan

Chapter 11 in Risk and Foreign Direct Investment, 2006, pp 189-208 from Palgrave Macmillan

Abstract: Abstract The aim of the chapter is to show how an investment project can be appraised, taking into account all the complexities of decision making. Most of the book has been devoted to placing the investment decision in its appropriate contexts, and in delineating how to identify and conceptualise the various risk environments which confront decision makers. This chapter starts by considering the two stages required in incorporating risk into the valuation of an investment project, quantification of country risk and valuation of an investment project. It brings together the different approaches — financial, strategic and organisational, and the different risk environments, culminating in the statement of an expanded net present value formula and how to determine the inputs into such a formula.

Keywords: Foreign Direct Investment; Discount Rate; Host Country; Risk Premium; Investment Project (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-62483-2_11

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DOI: 10.1057/9780230624832_11

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