After considering the long-term implications of the project such as political risk and foreign tax regulations,a multinational firm called Company X decides to purchase a foreign company to merge with its foreign subsidiary.This is an example of:
A) Cash management
B) Projection analysis
C) Capital budgeting
D) Decentralized management

Question

Quizplus · Accepted Answer

This is an example of capital budgeting because the multinational firm is making a long-term investment decision by acquiring a foreign company to merge with its foreign subsidiary. The decision involves considering the long-term implications such as political risk and foreign tax regulations, which are factors that typically affect capital budgeting decisions. Cash management, projection analysis, and decentralized management do not fully capture the scope of this decision.

After Considering the Long-Term Implications of the Project Such as Political