The Impact of Blocked Funds on the Net Present Value

question 32

Multiple Choice

The impact of blocked funds on the net present value of a foreign project will be greater if interest rates are ____ in the host country and there are ____ investment opportunities in the host country.​

• A) ​very high; limited
• B) ​very low; limited
• C) ​very low; numerous
• D) ​very high; numerous

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Definitions:

Factory Overhead

encompasses all indirect costs associated with manufacturing operations, including utilities, maintenance, and factory manager salaries.

Administrative Expenses

Expenses related to the general operation of a business, such as salaries of executive officers and costs of general services.

Selling Expenses

Costs incurred directly and indirectly in selling products or services, including advertising, sales commissions, and store operations.

Factory Overhead Rate

A measure used to assign the total indirect manufacturing costs to individual units of production, often based on a standard costing system or activity-based costing.