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Explain the Difference Between Vertical FDI and Horizontal FDI

question 22

Essay

Explain the difference between vertical FDI and horizontal FDI. Provide an example that illustrates the difference between vertical and horizontal integration.


Definitions:

Specific Invoice

An itemized bill showing quantities, descriptions, prices, and terms of products and services provided by a seller to a buyer.

Ending Inventory

The total value of all unsold goods remaining at the end of an accounting period.

Recent Invoices

The latest billing statements or documents issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices.

Full Disclosure Principle

The accounting principle that requires companies to fully disclose on their financial reports changes in accounting procedures and methods along with effects of the change as well as justification for change.

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