Which of the Following Is a Problem When a Firm

question 69

Multiple Choice

Which of the following is a problem when a firm tries to coordinate and control the worldwide operations of its subsidiaries?

• A) The management personnel of its subsidiaries are fluent in several languages.
• B) The countries in which the subsidiaries are located do not place constraints on the transfer of corporate resources.
• C) Cash flows in different subsidiaries are denominated in different currencies.
• D) The terms of trade determined after negotiation with the host government and the multinational corporation are well aligned to the firm's policies.
• E) All the countries in which the subsidiaries are based have homogeneous cultural heritages.

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Definitions:

One-Time Added Profit

Profit earned from a unique, non-recurring transaction or event.

Profit-Maximizing Firm

A company that operates in such a way as to maximize its profits by determining the best levels of production and pricing.

Interest-Rate Cost of Funds

The expense associated with borrowing money, typically represented as a percentage of the total amount borrowed.

Corporate Decision

Strategic choices made by a company’s management that influence its operations, finances, and overall business direction.