An Example of A/an ____________Is If a Subsidiary in Brazil

question 61

Multiple Choice

An example of a/an ____________is if a subsidiary in Brazil needs Brazilian reals while a Brazilian company's subsidiary in the U.S. needs dollars. The Brazilian firm can lend reals to the U.S. owned subsidiary in Brazil while it borrows an equivalent amount of dollars from the U.S. parent in the U.S.

• A) unparallel loan
• B) overdraft
• C) parallel loan
• D) risky loan

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Definitions:

Internal Rate of Return

The discount rate at which the net present value of all the cash flows from an investment or project equals zero, used as a gauge for its profitability.

Working Capital

The amount of current assets minus current liabilities, indicating the liquidity of a business.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period, used in capital budgeting to assess the profitability of an investment.

Working Capital

An indicator of a company's short-term financial health and operational efficiency, calculated as current assets minus current liabilities.