Question

When new facilities are built and operated overseas that require large investment of capital because these new establishments are tailored to the exact needs of the home country firm, it is called a(n) _____.
a. exporting.b. subsidiary.c. strategic alliance.d. multinational enterprise.e. foreign acquisition.

Answer 1

Answer:

b. subsidiary

Explanation:

Subsidiaries are companies that belong to a larger parent company. They are usually established overseas as an extension of the parent company's operations.

Parent companies of the subsidiaries hold controlling interest in stock, therefore they tailor the subsidiaries to their exact needs.

When there is a 100% ownership by the parent company it is called a wholly owned subsidiary