If an MNE wants to centralize most working capital functions, it must be able to reposition funds globally whenever and wherever it wants quickly and at a low cost. This if often a challenge in developing countries, so companies have devised many mechanisms for repositioning funds. Operations-related mechanisms for moving funds into or out of a particular country include all except which of the following?
A) Intracompany payments for purchases of goods and services.
B) Payment/receipt of dividends.
C) Payment/receipt of administrative overhead allocations.
D) Payment/receipt of royalties.
E) None of the above; all are operations-related mechanisms for moving funds into or out of a particular country.

Question

Quizplus · Accepted Answer

Payment/receipt of dividends is not considered an operations-related mechanism for moving funds. It is a financial transaction related to ownership and investment returns, rather than operations such as purchasing goods and services, administrative overhead, or royalties.

If an MNE Wants to Centralize Most Working Capital Functions