The Threat of Expropriation Creates an Incentive for the Multinational

question 50

True/False

The threat of expropriation creates an incentive for the multinational firm to minimise inventory holdings and to bring in goods only as needed.

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Definitions:

Controllable Margin

The portion of profit or margin over which management has control, usually excluding fixed costs.

Operating Assets

Assets that are used for the day-to-day operations of a business, intended to generate revenue.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the initial cost of the investment.

Direct Fixed Costs

Expenses that are consistent and directly tied to the production of goods or services but do not vary with the level of output.