What Is Foreign Direct Investment

question 34

Multiple Choice

What is foreign direct investment?

• A)A loan from the International Monetary Fund made directly to a country's central bank.
• B)A loan intended to bypass corrupt local officials by going straight to a targeted industry.
• C)A loan made directly to a foreign ruler.
• D)An investment in which a company maintains control of its assets in another country.
• E)Investments in other countries in which investors have no role in managing the assets.

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Definitions:

Proportionate Interest Goodwill Method

An accounting method used to calculate goodwill in the consolidation of financial statements, based on the parent company's proportionate share in the net assets of the subsidiary.

Goodwill Impairment Losses

are losses recognized when the carrying amount of goodwill exceeds its recoverable amount.

Indirect NCI

Refers to a non-controlling interest in an entity that is owned through another subsidiary rather than directly.

Allocation of the Dividend

The process of distributing a portion of a company's earnings, decided by the board of directors, to its shareholders in proportion to their shareholding.