A US-Based MNC Has Just Established a Subsidiary in Algeria

question 62

Multiple Choice

A U.S.-based MNC has just established a subsidiary in Algeria. Shortly after the plant was built, the MNC determines that its exchange rate forecasts, which had previously indicated a slight appreciation in the Algerian dinar, were probably false. Instead of a slight appreciation, the MNC now expects that the dinar will depreciate substantially due to political turmoil in Algeria. This new development would likely cause the MNC to ____ its estimate of the previously computed net present value.

• A) lower
• B) increase
• C) lower, but not necessarily if the MNC invests enough in Algeria to offset the decrease in NPV
• D) increase, but not necessarily if the MNC reduces its investment in Algeria by an offsetting amount
• E) none of the above

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Definitions:

Social Relationships

The connections and interactions between individuals or groups in society, impacting emotional, physical, and social well-being.

Sense of Consistency

The perception that one's life, experiences, and environment are stable, predictable, and reliable over time.

Social Contacts

Interactions between individuals that facilitate the exchange of information, support, and personal relationships.

Elders' Psychological Functioning

The cognitive and emotional aspects of aging, including changes in memory, problem-solving abilities, and emotional regulation among older adults.