In Determining Why a Firm Becomes Multinational There Are Many

question 42

Multiple Choice

In determining why a firm becomes multinational there are many reasons.One reason is that the firm is a market seeker.Which of the following is NOT a reason why market-seeking firms produce in foreign countries?

• A) satisfaction of local demand in the foreign country
• B) satisfaction of local demand in the domestic markets
• C) political safety and small likelihood of government expropriation of assets
• D) All of the above are market-seeking activities.

---

Definitions:

Ex Post

An analysis or consideration of events after they have happened, focusing on actual results rather than forecasts.

Asset Lives

The estimated useful life of an asset, determining over what period the asset's cost will be depreciated or amortized.

Compensating Balances

Minimum account balances that a borrower must maintain as part of a lending agreement, often used to offset a portion of the bank's cost in providing the loan.

Effective Interest Rate

The actual interest rate earned or paid on an investment, loan, or financial product, taking into account the effects of compounding over a given period.