In Financing a Foreign Subsidiary, an International Firm Borrows Money

question 63

Multiple Choice

In financing a foreign subsidiary, an international firm borrows money from local banks or financial institutions. This financing approach works well when:

• A) The company and the bank know each other very well
• B) National interest rates can be kept low
• C) Local stock markets are undeveloped
• D) None of the above
• E) All of the above

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Definitions:

Financial Planning

The ongoing process of managing one's finances to meet personal goals and prepare for the future, involving savings, investments, and budgeting.

Iterative Process

An iterative process is a procedure or method that is repeated over and over again to gradually approximate a desired result or to refine a system.

Sales Growth

An increase in sales over a specific period, indicating a company's financial health and performance.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or in the operating cycle of a business.