Which of the Following Statements Holds True for a Decentralized

question 25

Multiple Choice

Which of the following statements holds true for a decentralized financial organization structure?

• A)The government of the host country in which the subsidiary is located makes financing or investment decisions for the organization, taking advantage of local knowledge and moving quickly to respond to opportunities or uncertainties.
• B)A decentralized financial organization structure enables the firm to gain economies of scale for investment and borrowing activities that can reduce transaction costs and provide the firm with the most competitive pricing.
• C)Subsidiaries or regions make financing or investment decisions for their region, taking advantage of local knowledge and moving quickly to respond to opportunities or uncertainties.
• D)The financial institutions which fund the organization set guidelines for the headquarters as well as the subsidiaries to follow, pool funds, leverage the benefits of scale for investment and borrowing, and hire knowledgeable staff to make the most effective, firm-wide decisions.
• E)All finance decisions are performed at headquarters, which sets guidelines for subsidiaries to follow, pools funds, leverages the benefits of scale for investment and borrowing, and hires knowledgeable staff to make the most effective, firm-wide decisions.

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Definitions:

Estimable Amount

A quantifiable sum that can be accurately predicted or approximated in the accounting records.

Interest Calculations

The process of determining the interest payment on a loan or investment, based on the principal, rate, and time.

Merchandise

Merchandise consists of goods that a retailer purchases to sell to its customers for profit.

Journalize

The process of recording financial transactions in a company's journal as part of the accounting cycle.