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Financial and Operational measures of MNC

State some of financial and operational measures MNC can take minimize the political risk linked with the foreign investment project?

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a) MNCs must explicitly include political risk in the capital budgeting procedure and adjust the project’s NPV accordingly.

b) MNCs may form the joint-ventures with the local partners or form a consortium along with other MNCs in order to decrease the risk.

c) MNCs may purchase the insurance against the political risk from Lloyd’s, OPIC, and so on.

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