Because Many Countries Do Not Permit Foreign Companies to Purchase

question 93

Multiple Choice

Because many countries do not permit foreign companies to purchase and operate facilities in their countries,a company wishing to do business in such a country may share the business costs with a firm from the host country by forming a

• A) direct investment.
• B) contract manufacturing arrangement.
• C) corporation.
• D) joint venture.
• E) sole proprietorship.

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Definitions:

Financing Activities

Transactions and events that affect long-term liabilities and equity of a company, including issuing debt, repaying loans, and distributing dividends.

Fiscal Year

A one-year period used by governments and businesses for accounting and financial reporting, which may or may not align with the calendar year.

Depreciation Expense

Spreading out the expense of a physical asset over the period it's in use.

Operating Activities

Components of a business's cash flow statement that relates to its core operations, including cash received from sales and cash paid for goods and services.