What Is the Primary Advantage of a Subsidiary

question 159

Multiple Choice

What is the primary advantage of a subsidiary?

• A)The company can then franchise.
• B)The company maintains control over technology.
• C)The company gains from tax advantages.
• D)The company maintains host country advantages.

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Definitions:

Discounted Payback

A capital budgeting method that calculates the time required to break even on an investment, considering the present value of future cash flows.

Payback

The period of time required to recover the cost of an investment.

Liquidity

The simplicity of transforming an asset or security into immediate cash without impacting its market value.

Internal Rate of Return

The discount rate that makes the net present value (NPV) of all cash flows (both positive and negative) from a particular project or investment equal to zero.