Question
In: Finance
When the administrative fees are charged by the parent
When the administrative fees are charged by the parent, the earnings of the subsidiary from the project will appear low to the parent and high to the subsidiary.
True or False
Solutions
Expert Solution
The correct answer is False
When there is cash outflow or charged then the earnings got reduced, If it is charged by the parent then the earning of parent will be reduced not of subsidiary. Therefore, this statement is false
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