Question

Assume that an MNC purchases a foreign building, and then leases the building to another party and allows that party to operate the business in the building for 30 years if the party follows standards set by the MNC. This process is referred to as:
a. A foreign acquisition.
b. franchising.
c. a licensing agreement.
d. exporting.

Answer 1

Answer:

The correct answer is letter "A": A foreign acquisition.

Explanation:

In corporate terms, a foreign acquisition is the purchase of a company or the division of a company. Some acquisitions are paid in cash while others are paid with a combination of cash and the acquiring company stock or even financed with debt which is called a leveraged buyout.  

Foreign acquisitions are often done by another company in a similar line of business who wishes to use the purchased business to improve its own operations.