Which of the Following Is an Advantage of Direct Investment

question 17

Multiple Choice

Which of the following is an advantage of direct investment?

• A) Direct investment involves fewer risks than joint ownership.
• B) Direct investment ensures that a firm is shielded from market changes.
• C) Direct investment allows a firm to keep full control over the investment.
• D) Direct investment involves minimal financial or time expenditures.
• E) Direct investment protects the firm from currency devaluation.

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Definitions:

Lockbox System

A service offered by banks to companies for the receipt of payment from customers, utilizing a special post office box to speed up the deposit process.

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at par, used by governments to raise funds and investors to park short-term funds.

Collection Time

The average period it takes for a business to receive payments owed by its customers in terms of accounts receivable.

Weekly Disbursements

Refers to payments made by a business on a weekly basis, potentially including payroll, supplier payments, or other operational expenses.