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Both External and Internal Factors Affect the Operation of an MNE

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Essay

Both external and internal factors affect the operation of an MNE. External factors are outside the immediate control of the firm while internal factors are within the control of the firm. Give examples for both and discuss how they would affect the operations of the multinational enterprise.


Definitions:

Net Profit Margin

A financial ratio that shows the percentage of profit a company generates from its revenues.

Operating Income

Earnings before interest and taxes, representing the profit generated from a company's core business operations.

Net Income

The profit a company generates after all expenses, taxes, and costs have been subtracted from total revenue, indicating financial health.

Income Tax Expense

The accounting term for income taxes due to federal, state, and local governments within a given fiscal period.

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