Consider the Following Two Cases

question 62

Multiple Choice

Consider the following two cases.In the first,a U.S.firm purchases 18% of a foreign firm.In the second,a U.S.firm builds a new production facility in a foreign country.Both are ________,with the first referred to as ________ and the second as ________.

• A) foreign direct investment (FDI) outflows; greenfield; brownfield
• B) foreign direct investment (FDI) inflows; greenfield; brownfield
• C) foreign direct investment (FDI) outflows; brownfield; greenfield
• D) foreign direct investment (FDI) inflows; brownfield; greenfield
• E) foreign direct investment (FDI); inflows; outflows

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Definitions:

Distribution of Cash

The process of allocating cash among creditors, investors, and operational expenses within a company.

Income and Loss Sharing

A method of distributing profits and losses among business partners or investors according to a pre-agreed ratio.

Noncash Assets

Assets that cannot be easily converted into cash, such as property, equipment, and investments.

Liquidated

The process of converting assets into cash or cash equivalents by selling them on the open market.