A Multinational Company Recently Built a Factory in Nicaragua to Take

question 57

Multiple Choice

A multinational company recently built a factory in Nicaragua to take advantage of lower labor costs. However,high sulfur emissions from the new factory are causing acid rain within Nicaragua and in surrounding countries as well. This illustrates:

• A)The fact that climate change is a more serious problem than pollution
• B)The fact that pollution is a more serious problem than climate change
• C)The effects of globalization on the environment common to all
• D)The effects of globalization on developing countries versus developed countries
• E)The need to put a halt to globalization until environmental damages can be addressed or avoided

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Definitions:

Intercompany Profit

Profits that arise from transactions between companies under common control, which may need to be eliminated in consolidated financial statements.

Unrealized Profits

Gains on transactions that have occurred but have not yet been realized through the receipt or payment of cash.

Gross Margin

The difference between revenue and cost of goods sold, which indicates how much a company earns from its core operations.

Effective Tax Rate

The average rate at which an individual or corporation is taxed, considering all forms of taxes.