When Renault Motor Co. builds a new production facility in Venezuela and it is the sole owner of the facility, this is an example of a(n) _________ investment approach.
A) Indirect
B) Management contracting
C) Joint venture
D) Licensing
E) Direct

Question

Quizplus · Accepted Answer

When Renault Motor Co. owns the production facility in Venezuela, it is a direct investment approach as the company has complete ownership and control over the facility. Indirect investment involves investing in foreign stocks or bonds, management contracting involves hiring a local firm to manage operations, joint ventures involve sharing ownership and control with a local partner, and licensing involves granting permission to use patented technology or intellectual property.