An MNC Considers Direct Foreign Investment in Germany

question 34

Multiple Choice

An MNC considers direct foreign investment in Germany. It is mainly concerned with the subsidiary's ability to generate sufficient sales there. The country risk characteristic that would best address this concern is:​

• A)the host government's tax rates charged on remitted earnings.
• B)the possibility of blocked funds.
• C)the state of the economy in Germany.
• D)the possibility of a withholding tax imposed by the German government.

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Definitions:

Efficiency Gains

Improvements that allow more to be achieved with the same amount of resources, often leading to cost savings and productivity increases.

PPACA

Stands for Patient Protection and Affordable Care Act, a comprehensive health care reform law enacted in March 2010 intended to improve access to health insurance for US residents.

Health Insurance

is a type of insurance coverage that pays for an individual's medical and surgical expenses or reimburses losses from illness or injury.

Government Insurance

Protection or coverage provided by a governmental entity as opposed to private insurance companies, often for health, employment, or social welfare purposes.