Question

Eurenasia is a country that has frequently been assigned low macro-assessment ratings of country risk in the recent past due to its tendency to war with neighboring nations. MNC A is considering the establishment of a subsidiary to manufacture personal computers, while MNC B is considering the establishment of a subsidiary to manufacture tanks. Which of the two MNCs is likely to be less affected by the low macro-assessment?
a. MNC A.b. MNC B.c. both will be equally affected, since the macro-assessment does not vary.d. none of the above

Answer 1

Answer:

Eurenasia is a country that has frequently been assigned low macro-assessment ratings of country risk in the recent past due to its tendency to war with neighboring nations. MNC A is considering the establishment of a subsidiary to manufacture personal computers, while MNC B is considering the establishment of a subsidiary to manufacture tanks. Which of the two MNCs is likely to be less affected by the low macro-assessment?

Option B is correct -  MNC B  will be less affected by low macro-assessment.

Explanation:

Due to the tendency of Eurenasi to war with neighboring countries, the manufacture of tanks by MNC B  will be less affected by low macro-assessment because, during war periods, tank sales will increase. Whereas, Low macro assessment will affect MNC A because it selling computers will be affected by war.

Therefore, Option B is correct -  MNC B  will be less affected by low macro-assessment.