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Ch16Essay(Small) - considering a new asset The longer an...

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Essay Questions E
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53. (p. 496-497) Explain the risk factors a firm must assess when considering an investment in a new asset. When considering the risk associated with a prospective asset or project, financial managers must consider several things. If the investment is foreign, risk assessments must include the political climate and economic stability of the region. Time is another factor to assess when
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Unformatted text preview: considering a new asset. The longer an asset is expected to last, the greater is its potential risk. Other factors are the stability and competitive nature of the marketplace. AACSB: Reflective Thinking A Bloom's Taxonomy: Knowledge B Difficulty: Hard D Learning Objective: 3 L...
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