One Particular Type of Political Risk That MNCs and Investors

question 70

Multiple Choice

One particular type of political risk that MNCs and investors may face is corruption associated with the abuse of public office for private benefits.

• A)Investors may often encounter demands for bribes from politicians and government officials for contracts and smooth bureaucratic processes.
• B)If companies refuse to make grease payments, they may lose business opportunities or face difficult bureaucratic red tape.
• C)They may risk violating laws or being embarrassed when the payments are discovered and reported in the media.
• D)All of the above

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Definitions:

Prepaid Rent Expense

Prepaid rent expense is an advance payment for rent that is recorded as an asset on the balance sheet until it is used or consumed in future periods.

Liability

An obligation that a corporation or individual has to another entity, typically financial in nature, such as loans or accounts payable.

Asset

Resources owned by an individual or business that have economic value and can be used to meet debts, commitments, or legacies.

Prepaid Rent Expense

An accounting term for rent payments made in advance of the rental period, recorded as an asset on the balance sheet until the period of use.