AES Corporation historically used a very simple method that was used for all projects being examined, regardless of geographical location. The method worked well when implemented in the U.S., but when it began to be used to evaluate international projects, it was giving the company false NPV values. This evaluation method also failed to take into account increased WACC, currency risk, political risk, and sovereign risk, which resulted in projects that began to fail in the early 2000’s. By counting to use this flawed evaluation method the company destroyed its stock price and market capitalization, losing millions in stockholders equity in the process. This debt structure caused significant currency risk for both AES and it subsidiaries. Exhibit 6 shows that debt was denominated in USD for the subsidiaries, while they were bringing in revenues in foreign currencies. AES also lost cash flows when depreciation occurred since the money made by its subsidiaries was worth far less after devaluation of foreign currencies. Venerus evaluation method was a vast upgrade to what AES had been using in the past. His method took into account many more factors than the previous model. It allowed for the company to create a WACC for each project. Which allowed AES to capture the country-specific risks for each foreign market. This was a good idea because it allowed AES to also consider the market risk of each country. It does a much more adequate job in predicting realistic NPV of projects. Since we’re given the cash flows in exhibit 12 it is possible to compare the NPV for the projects. To calculate the cash flows at the original 12% discount rate, the 23.1% for Pakistan, and 6.45% for the U.S. it is easy to compare the differences in NPV. The original 12% discount would yield a NPV of $505.51 million, the Pakistan 23.1% discount rate would