Which of the Following Factors Is Least Likely to Cause

question 65

Multiple Choice

Which of the following factors is least likely to cause the required rate of return to vary among MNCs assessing the same foreign target?

• A) differences in the timing of remittances from the target to the parent.
• B) differences in the desired use of the target.
• C) differences in the local risk-free interest rate.
• D) differences in the ability to use financial leverage.

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Definitions:

Exports

Goods and services produced in one country and sold to buyers in another, contributing to the exporting nation's GDP.

Net National Product

The total market value of all goods and services produced by the residents of a country, adjusted for depreciation.

Depreciation

Depreciation is the accounting process of allocating the cost of a tangible asset over its useful life, reflecting the loss of value due to wear and tear, decay, or obsolescence.

Indirect Business Taxes

Taxes imposed on the production, sale, or consumption of goods and services, such as sales tax or value-added tax, which are indirectly paid by consumers.