A Foreign Direct Investment Occurs When ________

question 56

Multiple Choice

A foreign direct investment occurs when ________.

• A)a company owns at least 25% of a foreign firm
• B)a company has a controlling interest in a foreign company
• C)foreign ownership is in private rather than government securities
• D)a foreign firm agrees to a licensing agreement with a large conglomerate

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Definitions:

Invested Assets

Invested assets refer to the resources that have been allocated by an individual or company toward investments with the expectation of generating future profits.

Total Assets

The sum of all resources controlled by a company as a result of past transactions, expected to provide future economic benefits, including both current and non-current assets.

Transfer Price

The price at which goods and services are sold between divisions within the same company.

Excess Capacity

The unused production capability of a company, indicating that the company can produce more than is currently being demanded.