When Companies Realized They Could Produce in the Most Efficient

question 16

Multiple Choice

When companies realized they could produce in the most efficient and productive locations in the world and simply export to markets worldwide,a new surge of foreign direct investment flowed into ________.

• A)newly industrialized nations and emerging markets
• B)highly developed economies
• C)home country markets
• D)totalitarian and theocratic nations only

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Definitions:

Expense Recognition

The accounting principle dictating that expenses are recorded when incurred, not necessarily when paid.

Financial Capital Maintenance

A concept where profit is only recognized if the financial amount of a company's net assets at the end of the period exceeds the financial amount at the beginning, excluding any distributions to, or contributions from, owners during the period.

Net Income

The amount of earnings left over after all expenses, including taxes and cost of goods sold, have been subtracted from total revenue, indicating the financial success or profitability of a company over a specified period.

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, significantly impacting a company's financial position.