Question

Leodan, a glass manufacturing firm based in the U.S., has sole control over several glass manufacturing facilities located all over the world. The company assumes the entire risk if any of the facilities undergoes losses, and it enjoys all the profits if the facilities do well. Which of the following methods has Leodan used to conduct business globally in this scenario?

Answer 1

Answer:

the formation of wholly owned affiliates.

Explanation:

Based on the information provided within the question it can be said that in this scenario it seems that Leodan has used the formation of wholly owned affiliates. This term refers to a company that has been completely bought by another company, where they now own 100% of it and take full responsibility for all the losses and profit of that subsidiary. Which is what Leodan has with the several glass manufacturing facilities located all over the world.