Which of the following is not directly considered in the decision by a U.S.-based MNC to divest a subsidiary?
A)the required rate of return on the subsidiary
B)forecasted exchange rates of the subsidiary's currency relative to the dollar
C)the initial outlay on the project
D)the possible selling price of the project

Question

Quizplus · Accepted Answer

The initial outlay on the project is a factor considered when making the initial investment decision, not in the decision to divest. A U.S.-based MNC would consider the required rate of return, forecasted exchange rates of the subsidiary's currency relative to the dollar, and the possible selling price of the project when deciding whether to divest a subsidiary.

Which of the Following Is Not Directly Considered in the Decision