Which of the following is true for a multinational enterprise (MNE)?
A)Its affiliates usually get nearly all of their total financing from the direct investment flows.
B)It usually transfers its liabilities to its foreign subsidiaries.
C)Its domestic tax burden is mostly borne by its foreign affiliates.
D)It usually provides intangible assets to its affiliates for their usage.

Question

Quizplus · Accepted Answer

MNEs often provide intangible assets, such as intellectual property, to their affiliates for their use, which can help improve the competitiveness of their subsidiaries. A is incorrect because MNEs may use a mix of direct investment flows and other financing sources for their subsidiaries. B is incorrect because MNEs typically assume overall responsibility for their liabilities, rather than transferring them to their foreign subsidiaries. C is incorrect because MNEs must comply with tax laws in both their home country and the countries where they operate, and the allocation of tax burden can vary depending on various factors.

Which of the Following Is True for a Multinational Enterprise