​Assume a U

question 10

Multiple Choice

​Assume a U.S. MNC initiates direct foreign investment in the United Kingdom. If the British pound is expected to appreciate against the dollar, the dollar value of earnings remitted to the parent should ____. The parent may request that the subsidiary ____ in order to benefit from the expectation about the pound.

• A) ​increase; postpone remitting earnings until the pound strengthens
• B) ​decrease; postpone remitting earnings until the pound strengthens
• C) ​decrease; remit earnings immediately before the pound strengthens
• D) ​increase; remit earnings immediately before the pound strengthens

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Definitions:

Planned Objectives

Specific, measurable goals that an organization or individual aims to achieve within a set timeframe.

Flexible Budgeting

A budget that adjusts to changes in activity levels or other factors affecting costs, providing a more accurate comparison to actual results.

Unit Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor, calculated on a per unit basis.

Static Budget

A financial plan that does not change or adjust over the period, even when there are significant changes in the levels of activity.