When Foreign Direct Investments Are Made Part of a Global

question 21

Multiple Choice

When foreign direct investments are made part of a global production network such integration

• A) insures that import opportunities will not be available to indigenous producers.
• B) insures that MNCs will reduce the amount of funds available for investments in the host country.
• C) insures that revenues generated by the local affiliate will not be used to enhance the welfare of the host country.
• D) creates export opportunities that would be otherwise unavailable to indigenous producers.
• E) guarantees that technology will not eventually be transferred to the host country.

Evaluate the advantages and disadvantages of bond financing.

Know the features, benefits, and risks associated with convertible bonds.

Apply critical thinking to assess the impact of financing decisions on a company’s financial statements.

Understand the principles of calculating bond interest payments.

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Definitions:

Cash Budget

A forecast of cash inflows and outflows over a specific period, used for cash management.

Cash Receipts

The collection of money, typically in the form of cash or checks, by a business from its customers for goods or services provided.

Cash Disbursements

Outflows of cash for expenses, purchase of assets, or repayment of debt by a business within a given period.

Manufacturing Overhead Budget

A financial plan that estimates the expected costs related to manufacturing overhead for a specific period.