If an MNC Exports to a Country, Then Establishes a Subsidiary

question 40

Multiple Choice

If an MNC exports to a country, then establishes a subsidiary to produce and sell the same product in the country, then cash flows from prevailing operations would likely be ____ affected by the project. If an MNC establishes a foreign manufacturing subsidiary that buys components from the parent, the cash flows from prevailing operations would likely be ____ affected by the project.

• A) adversely; adversely
• B) favorably; adversely
• C) favorably; favorably
• D) adversely; favorably

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Definitions:

Fibrous Capsule

A dense tissue layer that surrounds certain organs, providing support and protection.

Fibrocartilage Disks

Tough, fibrous cartilage structures found in joints, acting as cushions to prevent bone-to-bone contact.

Menisci

Crescent-shaped cartilaginous structures in the knee joint that distribute weight and reduce friction during movement.

Synovial Membrane

The lining of the joint spaces that secretes synovial fluid for lubrication.