When a U.S.-based MNC wants to determine whether to establish a subsidiary in a foreign country, it will always accept that project if the foreign currency is expected to appreciate.
a.True
b.False

Question

Quizplus · Accepted Answer

The decision to establish a subsidiary in a foreign country depends on various factors such as market potential, economic stability, political environment, competitive landscape, and exchange rate stability. Appreciation of the foreign currency alone cannot be the sole determinant for accepting the project as it may lead to higher export costs, reduced competitiveness, and decreased profitability in the long run. Therefore, the statement is false.

When a US-Based MNC Wants to Determine Whether to Establish a Subsidiary