A company would want to make a direct investment in countries where the company’

Question

A company would want to make a direct investment in countries where the company’s home currency has higher purchasing power because the company should be able to:

a)purchase labor, land, and factory equipment more cheaply in the foreign country than at home.

b)find investors that would want to invest in the company’s home country business.

c)find investments that can be made with a higher return than at home. WRONG

d)sell labor, land, and factory equipment at a higher price in the foreign country than at home.

Explanation / Answer

a)purchase labor, land, and factory equipment more cheaply in the foreign country than at home.

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