Which of the Following Is NOT True About the Harvesting

question 50

Multiple Choice

Which of the following is NOT true about the harvesting or divestment of foreign operations?

• A)One of the motives is to use resources where the performance prospects are better.
• B)Companies can harvest or divest by selling existing facilities.
• C)Closing a facility can be difficult because of governmental performance contracts.
• D)Companies have tended to divest too soon, rather than working to improve performance.

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Definitions:

Bargain Purchase Option

A provision in a leasing contract permitting the lessee to buy the leased item for a price well below the anticipated market value once the lease period concludes.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows, given a specified rate of return, rephrasing the value of future money in today's terms.

Economic Life

The duration during which an asset remains useful and productive for its intended purpose.

Capital Lease

A lease classified as a financial transaction where the lessee essentially buys an asset and finances it over time.