The ABC Company,a U

question 12

Multiple Choice

The ABC Company,a U.S.-based MNC,plans to establish a subsidiary in Spain to manufacture and sell water pumps.ABC has total assets of $80 million,of which $60 million is equity financed.The remainder is financed with debt.ABC considers its current capital structure optimal.The construction cost of the facility in Spain is estimated to be €8,500 million,of which €6,500 million is to be financed at a below-market rate of interest arranged by the Spanish government.The proposed project will increase the borrowing capacity by

• A)€1,215 million.
• B)€2,215 million.
• C)€3,215 million.
• D)€4,215 million.

---

Definitions:

Heider

Refers to Fritz Heider, an Austrian psychologist known for his work in the psychology of interpersonal relations and attribution theory.

Causes Of Behavior

The various psychological, social, environmental, and biological factors that contribute to an individual's actions and reactions.

Attribution Theory

A social psychology theory focused on how people interpret and identify the causes of others’ behavior, attributing it to either internal dispositions or external situations.

Basic Assumptions

Fundamental beliefs or principles that are accepted as true without proof and form the basis for reasoning or behavior.