Set Against the Initial Capital Inflow That Comes with FDI

question 113

Multiple Choice

Set against the initial capital inflow that comes with FDI must be the subsequent outflow of earnings from the foreign subsidiary to its parent company.Such outflows show up as capital outflow on balance-of-payments accounts.Some governments have responded to such outflows by restricting the amount of earnings that can be:

• A)repatriated to a foreign subsidiary's home country.
• B)reinvested in the host-market.
• C)earned by the foreign subsidiaries.
• D)invested in businesses concerning national security and sovereignty.

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Definitions:

Direct Materials

Raw materials that are directly traceable and contribute to the finished product in a manufacturing process.

Total Cost

The complete sum of all expenses incurred in producing a product or delivering a service, including both fixed and variable costs.

FIFO Process Cost Method

An inventory valuation method that assumes the first items produced or acquired are the first sold or used, standing for "First-In, First-Out."

Equivalent Units

A concept in cost accounting used to express the amount of materials or labor in terms of complete units of production.