Plz add explanation. worth of goods and services. This country (A) has a negativ
ID: 1131093 • Letter: P
Question
Plz add explanation.
worth of goods and services. This country (A) has a negative net foreign investment. (B) has a positive net foreign investment. (C) lends funds to foreigners. (D) Answers (B) and (C) are both correct. project is undertaken. The investment project will cost the company $90,000 and the current interest rate for funds is 10%. Given this information, the firm should (A) commit to the investment project since its rate of return is greater than the prevailing interest rate. not commit to the investment project since its rate of return is less than the prevailing interest rate. Both (A) and (B) are correct. (B) (C)Explanation / Answer
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The country is exporting goods worth USD 50Mn and the country is importing the goods worth USD60 Mn.
To calculate the net foreign investment of the country we need to substract the exports from the imports. If the value we obtains comes out to be positive then the investment is also positive otherwise it is negative.
Over her we have
Investment = USD(50-60) Mn
Invesment = USD-10Mn
Hence we have a negative investment for the country which is option A.
Option B is wrong as the value is negative.