Arco Inc. is thinking about building a new factory overseas. The firm has already calculated the NPV of the project using its usual discount rate of 8%. As part of its process of sensitivity analysis, Arco now wants to see how the project's NPV might be affected by increased economic instability in the new factory's home country. 

What is discount rate would be most appropriate to use in this set of calculations?

Answer rating: 100% (QA)

If Arco Inc wants to evaluate the impact of increased economic instability on the NPV of the project ... View the full answer