Question

The decision-making process for a company's reinvestment choices is often different from those for new investment choices because:

A) internal rate of return and other financial measurement criteria are more difficult to compile and analyze on existing operations, given currency translation distortions.
B) failure to support an existing investment may jeopardize the firm's operations and competitiveness in that country.
C) most of the net value of foreign investment comes from new international capital transfers rather than from reinvestment of earnings abroad.
D) corporate management feels that country managers are best able to make divestment decisions.

Answer 1

B) failure to support an existing investment may jeopardize the firm's operations and competitiveness in that country.

Step-by-step explanation:

The firm's existing investment has already given the company a competitive advantage in market that means a defensive approach is needed. There is need for a different decision making process suited for the new product going into the market which involves studying the market's reaction and other competitors ( if any) that is, an offensive approach is needed.

Answer 2

B) failure to support an existing investment may jeopardize the firm's operations and competitiveness in that country.

Step-by-step explanation: