If an MNC establishes a foreign manufacturing subsidiary that buys components from the parent, the cash flows from existing operations

If an MNC establishes a foreign manufacturing subsidiary that buys components from the parent, the cash flows from existing operations (at the home country) would likely be __ affected by the project. If an MNC exports to a country and then establishes a subsidiary to produce and sell the same product in that country, cash flows from existing operations (exports from the home country) would likely be __ affected by the project.

adversely; adversely

favorably; adversely

favorably; favorably

adversely; favorably

Solutions

Expert Solution

b.favorably; adversely.

Establising a foreign manufacturing subsidiary that buys components from the parent, the cash flow from existing operations will be favorably affected, since cash flow into the home country for export of components.

If the subsidiary produces and sells the same product in a country, the cash flows from existing operations will adversely affected, since the exports from home country stops.

jeff jeffy answered 2 years ago

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