Which of the Following Is Not a Significant Motive for the Formation

question 48

Multiple Choice

Which of the following is not a significant motive for the formation of multinational enterprises?

• A) Avoiding tariffs by obtaining foreign manufacturing facilities
• B) Obtaining the benefits from overseas comparative advantages
• C) The acquisition of natural resource supply sources
• D) Subsidies granted by the home government to overseas corporations

---

Definitions:

Deferred Income Taxes

Taxes applicable to income that is booked but not yet paid, reflecting the timing difference in recognizing income for accounting and tax purposes.

Financial Reporting Choices

The selection among alternative accounting methods and estimates by companies in presenting their financial information.

Interfirm Comparisons

The analysis and comparison of financial and operational data from different companies within the same industry, used to benchmark performance and practices.

Deferred Tax Assets

Financial items on a company's balance sheet that can be used to reduce future tax liability.