The Liability That Represents the Costs of Doing Business Abroad

question 13

Multiple Choice

The liability that represents the costs of doing business abroad that result in a competitive disadvantage vis-à-vis indigenous firms.

• A) liability of FDI
• B) liability of foreignness
• C) liability of domestics
• D) none of the above

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Definitions:

Productive Investment Projects

Initiatives undertaken by businesses or individuals that are expected to yield a return by increasing output or efficiency.

Uncertain Returns

The unpredictability associated with the outcome of an investment or the potential return on an investment.

Economic Profit

The difference between a firm’s total revenues and its total costs, including both explicit and implicit costs, reflecting the true profitability of the firm.

Accounting Profit

The financial gain calculated by subtracting total explicit costs from total revenue.