An American Clothing Manufacturer Has Recently Purchased a Clothing Factory

question 75

Multiple Choice

An American clothing manufacturer has recently purchased a clothing factory in Taiwan.This action is known as ________.

• A)importing
• B)exporting
• C)licensing
• D)direct investing
• E)franchising

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Definitions:

Depreciation

The monetary value decrease of an asset over time due to use, wear and tear, or obsolescence.

Perpetuity Growth Rate

The steady rate at which the cash flows from a perpetuity are expected to grow indefinitely.

Terminal Value

Terminal Value is an estimate of a business's value in the future when it is expected to have stable growth; often used in discounted cash flow (DCF) analyses to estimate a company’s valuation at a specified future point.

Inflation Rate

A measure of the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.