Direct Investment Refers To

question 111

Multiple Choice

Direct investment refers to:

• A)selling the right to use trademarks or patents to another firm.
• B)allowing companies to hire manufacturers to product their products in another country.
• C)a form of licensing.
• D)owning a company or facility overseas.
• E)combining the expertise and investments of two companies.

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Definitions:

Intangible Asset

An asset that lacks physical substance but provides economic benefits to a business, such as trademarks or patents.

Commercial Substance

A consideration in accounting that a transaction has significantly changed the economic circumstances of the participants.

Gain or Loss

The difference between the sale price of an asset and its original purchase price, indicating the financial outcome of a transaction.

Service Potential

This refers to the capacity or ability of a service or asset to provide benefits or usefulness to an entity or its operations.