How Can Local Financing Help MNCs Reduce Country Risk

question 47

Multiple Choice

How can local financing help MNCs reduce country risk?

• A)By raising funds locally,MNCs receive the tactic agreement of the country where the funds are raised that no government actions will be taken that will be adverse to the firm.
• B)If an MNC raises funds locally,it creates local stakeholders in the MNC,and countries may be reluctant to take actions that might damage or reduce the profitability of firms that have local stakeholders.
• C)If an MNC raises funds locally,it gains the support of the local capital markets which,in turn,lobby the local government not to take actions that will adversely affect firms that participate in the local capital market.
• D)When an MNC raises funds locally,it automatically receives special incentives from the local government that reduce country risk.

Analyze the financial impact of outsourcing decisions and overhead allocation methods.

Perform differential analysis for decision-making in various business scenarios.

Understand the principles of special orders and their impact on pricing and profitability.

Comprehend the cost-plus approach to product pricing, including the calculation of markup percentages.

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Definitions:

Statistical Evidence

Data or information collected and analyzed to support or refute a hypothesis, often derived from statistical tests.

Alternative Hypothesis

A statement that contradicts the null hypothesis and is tested to determine if there is significant evidence to support it.

Test Statistic

A value calculated from sample data used to make a decision on whether to reject the null hypothesis.

Null Hypothesis

A default hypothesis that there is no significant effect or difference, usually tested against an alternative hypothesis in statistical analysis.