Which of the following statements is correct?

Question

Quizplus · Accepted Answer

MNCs need to effectively manage their financial resources by structuring the bank accounts and cash balances of their subsidiaries. This helps to avoid liquidity and foreign exchange risks. Option A is incorrect as global dispersal of resources can create complexities in capital budgeting. Option C is incorrect as decentralization of cash management activities can increase risks due to lack of control. Option D is also incorrect as local disbursement, collection, and payroll should be decentralized to ensure local compliance and responsiveness.

Which of the Following Statements Is Correct