Which of the Following Is True About FDI

question 20

Multiple Choice

Which of the following is true about FDI?

• A) A focal firm makes minimum resource commitment as domestic firms take most of the financial responsibilities.
• B) A focal firm establishes a relatively permanent base in the foreign market, which increases flexibility for market and company conditions.
• C) A focal firm attains decreased risk due to the certainty in the foreign business environment.
• D) A focal firm attains maximum control by establishing a physical presence in the foreign market.

---

Definitions:

Revalued Upward

Revalued upward is a term used in accounting to indicate an increase in the book value of an asset to reflect its current market value.

Subsequent Depreciation

The allocation of an asset's cost over its useful life, considering any adjustments made following the asset's initial measurement and recognition.

Revaluation Method

A method used to adjust the carrying value of an asset to its current market value on the balance sheet.

IFRS

The International Financial Reporting Standards (IFRS) provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.