Answer:
D. international diversification
Explanation:
The Multinational corporations can reduce their risk by international diversification and reduced risk can increase debt capacity of MNC. The higher capacity to meet scheduled debt payment also reduces cost of capital.
The effect of international diversification on capital structure can be explained through
1. Co-insurance effect: Combining businesses with international firms provides reduction in operating risk and thereby increase debt capacity. This helps MNCs to include more debts in their capital structure.
2. Transaction cost theory. Internationalization is a way of internatilize intangible assets. Since intangible assets are not difficult to sale , international diversification helps MNCs to exploit their intangible assets. So MNCs with an eye of international diversification will try to develop these type of assets in their asset base.
3.Agency cost argument: MNCs will have high agency costs Diversification helps to reduce these agency costs International diversification creates larger markets and generates growth opportunities. Growth opportunities and debt ratios are inversely proportional .MNCs with higher growth opportunities will rely on equity rather than debt.
Answer:
This is false. buying a franchise is expensive, as it involves buying the rights of a business from the business owners, who are commonly referred to as ''franchisiors".
Explanation:
Ravi would not be able to run the franchise business the way he wants as the Franchisiors determines the business model and procedures. Hence, he would have a limited control on the business. Thus, I would advise Ravi to avoid going into a Franchise business, if his motive is to be his own boss and have control on his business.
Answer: True
Explanation: Industry specific sites are usually used by candidates that have of expertise in specific industry sectors, For example- any candidate having higher skill set in IT sector might visit such a sight.
These sights brings the win win situation in the market as the candidate gets the job in which he or she is best at and the industry gets the experts for every job it has.
Thus, the above statement is true.
Answer:
C. increase both total assets and total liabilities by $ 80,000.
Explanation:
Before the purchase:
Cash $25,000
Net Actives: $25,000
After the purchase:
Buildings $105,000
Notes Payable $80,000
Net Actives: $25,000
The total increase of the total active comes with an increase in the debts too, both in 80,000.
