Which of the Following Is a Method for Foreign Direct

question 82

Multiple Choice

Which of the following is a method for foreign direct investment?

• A) participating in business process outsourcing
• B) buying existing assets in a foreign country
• C) exporting services and products
• D) entering licensing agreements

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Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments compatible with the firm's goal of wealth maximization.

NPV

Short for Net Present Value, which is a financial metric used to evaluate the profitability of an investment or project, considering the time value of money.

IRR

Internal Rate of Return - a financial metric used to evaluate the profitability of potential investments, representing the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered in depreciation calculations and asset disposal decisions.