Which of the Following Is Not Directly Considered in the Decision

question 1

Multiple Choice

Which of the following is not directly considered in the decision by a U.S.-based MNC to divest a subsidiary?

• A) the required rate of return on the subsidiary.
• B) forecasted exchange rates of the subsidiary's currency relative to the dollar.
• C) the initial outlay on the project.
• D) the possible selling price of the project.

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Definitions:

Interest-Bearing Note

A debt instrument where the borrower pays the lender interest over the life of the note, in addition to repaying the principal amount.

Long-Term Debt

Borrowings of a business that are due for repayment more than one year in the future.

Sales Tax Rate

The percentage of sales price that is added to the price of goods and services sold, collected by the seller and remitted to a governmental tax authority.

Total Receipts

The total amount of cash received by a company during a specific period, including all sources of income.