In 1992,the Enron Development Corporation,a Subsidiary of the Houston-Based Energy

question 54

Multiple Choice

In 1992,the Enron Development Corporation,a subsidiary of the Houston-based energy company,signed a contract to build the largest-ever power plant in India,requiring a total investment of $2.8 billion.After Enron had spent nearly $300 million,the project was canceled by Hindu nationalist politicians in the Maharashtra state where the plant was to be built.Which of the following is true?

• A)Subsequently, Maharashtra invited Enron to renegotiate its contract.
• B)The lack of an effective means of enforcing contracts in a foreign country is clearly a major source of political risk associated with FDI.
• C)In an effort to pressure Maharashtra to reverse its decision, Enron "pushed like hell" the U.S.Energy Department to make a statement in June 1995 to the effect that canceling the Enron deal could adversely affect other power projects.The statement only compounded the situation.The BJP politicians immediately criticized the statement as an attempt by Washington to bully India.
• D)All of the above

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Definitions:

Lemonade Stand

A small, often temporary stand or business where lemonade is sold, typically run by children or as a simple small-scale business model.

Legislation

Laws that have been enacted by a governing body or the process of making or enacting laws.

Total

The complete amount or sum of parts.

Yugoslavia

A former country in Southeast Europe that existed from 1918 to 1992, known for its diverse culture and ethnicity.