Which of the Following Is Not an Advantage of International

question 38

Multiple Choice

Which of the following is not an advantage of international acquisitions over the establishment of a new subsidiary?

• A)The firm can immediately expand its international business.
• B)An international acquisition typically generates quicker cash flows than the establishment of a new subsidiary.
• C)International acquisitions are generally cheaper than the establishment of a new subsidiary.
• D)An international acquisition typically generates larger cash flows than the establishment of a new subsidiary.
• E)All of the above are advantages of international acquisitions.

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Definitions:

Present Value

The value today of a future cash amount or series of payments, based on a particular rate of return.

Fair Value

The value received from selling an asset or the expense of transferring a liability in a regulated transaction among market players on the date of evaluation.

Sale of Receivables without Recourse

A financial transaction where a business sells its accounts receivable to a third party without the obligation to repay if the third party fails to collect the receivables.

Required Disclosure

Mandatory information that companies must provide in their financial statements to give a full and fair view of their financial performance and position.