Which of the Following Is an Example of Reverse-Vertical FDI

question 51

Multiple Choice

Which of the following is an example of reverse-vertical FDI?

• A) Geely-a Chinese automaker-buys Volvo from Ford Motor Company.
• B) Toyota-a Japanese automaker-constructs a truck manufacturing plant in Texas.
• C) Chevron-an American petroleum firm-acquires a British petroleum firm.
• D) General Motors-an American auto manufacturer-builds a plant in China to supply Buicks to the Chinese market.

Acknowledge the necessity of including both variable and fixed costs in project cash flows according to the incremental cash flow principle.

Understand how to calculate and interpret the tax effects of selling an asset.

Understand the importance of differentiating between earnings and cash flows for project projections.

Recognize the redundancy of including financing costs in cash flow estimates.

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Definitions:

Skeletal Rearrangement

A molecular process in which a molecule's skeletal structure undergoes a reorganization, changing its connectivity without altering the formula.

Markovnikov Addition

A rule in organic chemistry that describes the outcome of addition reactions, specifically that hydrogen is added to the carbon with the greatest number of hydrogens in an unsaturated hydrocarbon.

Skeletal Rearrangement

A type of organic reaction where the carbon skeleton of a molecule is rearranged to give a structurally different molecule.

Radical Intermediate

A highly reactive species with unpaired electrons formed during some chemical reactions.