Question

Why do MNCs make investments?

• A. To increase their profits
• B. For charity
• C. For the welfare of poor countries
• D. None of these

Answer 1

The correct option is A To increase their profits

1:In order to increase their profitability many giant firms find it necessary to go in for horizontal and vertical integration.
2:For this purpose they find it profitable to set up their production or distribution units outside their home country.
3:The firms that sell abroad the products produced in the home country or the products produced abroad to sell in the home country must decide how to manage and control their assets in other countries.