Since Each Subsidiary May Be More Concerned with Its Own

question 2

True/False

Since each subsidiary may be more concerned with its own operations than with the overall operations of the MNC, a centralized management group may need to monitor the parent-subsidiary and intersubsidiary cash flows.

---

Definitions:

Payback Period

The length of time required to recoup the initial investment in a project, ignoring the time value of money.

Capital Investment

Funds invested in a business with the aim of furthering its business objectives, such as purchasing assets or funding new growth initiatives.

Fixed Intervals

Regular, predetermined periods of time during which certain activities or operations occur.

Equal Cash Flows

A series of identical cash inflows or outflows occurring over a specified period.