Can an investment project of a foreign subsidiary that has a positive net present value when evaluated as a stand-alone firm ever be rejected by the parent corporation? Assume that the parent accepts all projects with positive adjusted net present values
What will be an ideal response?
Answer: Yes, we know that countries impose withholding taxes on the dividends that are repatriated from subsidiaries to parent corporations. These taxes lower the value of the project to the parent. The parent must also be aware of the possibility of future problems accessing the foreign exchange market from the subsidiary's country. In general, political risk could be different for a subsidiary of a multinational corporation versus a local stand-
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Factory overhead includes:
a. Wages of office clerk. b. Sales manager's salary. c. Supervisor's salary. d. Tax accountant's salary.
A merchandising company's operating cycle begins with the purchase of merchandise and ends with the collection of cash from the sale.
Answer the following statement true (T) or false (F)
________ will erode a defined benefit pension plan
Fill in the blanks with correct word
On the due date, Merrel makes proper tender of full payment of a note to Russell, who is entitled to payment. If Russell refuses payment, Merrel is discharged from liability for:
a. the face amount of the note. b. any interest accrued until the time of tender. c. interest after the due date. d. All of these are correct.