When a Subsidiary Is Restricted from Remitting Its Profits to the Parent,the

question 5

Multiple Choice

When a subsidiary is restricted from remitting its profits to the parent,the parent:

• A)incurs opportunity costs in the sense that it cannot use those funds for other projects.
• B)incurs real costs in the nature of lost profits that could have been earned with the funds.
• C)is not affected since the restricted funds will eventually be paid to the parent.
• D)can avoid the negative effects of being deprived of the funds by borrowing and using the restricted funds as collateral for the loans.

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Definitions:

Process Innovation

The implementation of a new or significantly improved production or delivery method.

Scientific Principles

Fundamental concepts or laws that are based on scientific evidence and reasoning, serving as the foundation for scientific research and understanding of the natural world.

New Products

Innovations introduced to the market that meet new needs or better serve existing needs.

Average Total Cost Curve

A graphical representation that shows the average total cost of producing each quantity of output.