concentration of production is not favored when important exchange rates are expected
to remain relatively stable.
tariffs on industrial goods remain higher than tariffs on services.
direct effects of fdi arise when jobs are created in local suppliers as a result of the fdi
and when jobs are created because of increased local spending by employees of the
mne.
the ability to understand why people of other countries behave the way they do is
perceptual ability.
modern consumer products such as personal computers serve universal needs.
A European subsidiary of a U.S. firm will usually prepare its budgets in Euro.
A fee is compensation for professional services or expertise supplied to a foreign
subsidiary by the parent company or another subsidiary.
greenfield ventures are less risky than acquisitions in the sense that there is less
potential for unpleasant surprises.
many totalitarian regimes were able to deliver economic progress to the vast bulk of
their populations, which curbed the spread of democracy during the late 1980s.
according to the pragmatic nationalistic view, the mne is a tool for exploiting host
countries to the exclusive benefit of their capitalist-imperialist home countries.
a geocentric staffing policy seeks the best people for key jobs throughout the
organization, regardless of nationality.
cultural toughness refers to the relationship between the country of assignment and how
well an expatriate adjusts to a particular posting.
The connection between cash flows to the parent and the source of financing must be
recognized when performing capital budgeting for an international business.
an alliance is a way to bring together complementary skills and assets that neither
company could easily develop on its own.
when consumer tastes and preferences differ significantly between countries, there is
low pressure for local responsiveness.
if the market rate of interest is lower than the contractual interest rate, the bonds will
sell at
a.face value
b.a premium
c.a discount
d.an unknown amount
which of the following statements is true of the use of information technology in
financial services?
a.information technology prevents the spread of financial crises
b.financial services is an information-intensive industry
c.financial services do not use decisions making systems
d.it does not require to process large volumes of information
the efficiency frontier has a convex shape because of:
a.consumer surplus
b.diminishing returns
c.profitability
d.differentiation strategy
in which of the following situations would fdi improve the current account of the host
countrys balance of payments?
a.if the foreign subsidiary imports a substantial number of its inputs from abroad
b.if the fdi reduces existing employment opportunities
c.if the fdi is a substitute for imports of goods or services
d.if the fdi results in substitution of products produced domestically
on january 1, sewell corporation issues $1,000,000, 5-year, 12% bonds at 96 with
interest payable on january 1. the entry on december 31 to record accrued bond interest
and the amortization of bond discount using the straight-line method will include a
a.debit to interest expense, $60,000
b.debit to interest expense, $120,000
c.credit to discount on bonds payable, $8,000
d.credit to discount on bonds payable, $4,000
which of the following statements is true about small business administration (sba)?
a.it is the most comprehensive source of export opportunities information
b.sba is a private organization managed by leaders of large corporate
c.the sba employs trade officers throughout the united states
d.sba offers help exclusively to small businesses that sell products within u.s
why is it said that not all the new jobs created by fdi represent net additions in
employment?
a.because of the uncertainty of the overall economic environment
b.because most of the job creation is indirect in nature
c.because jobs created by an investment may be offset by the jobs lost in domestic
companies
d.because the unemployment rate more or less remains constant over the short-term
thayer company purchased a building on january 2 by signing a long-term $4,200,000
mortgage with monthly payments of $38,500. the mortgage carries an interest rate of 10
percent. the amount owed on the mortgage after the first payment will be
a.$4,200,000
b.$4,196,500
c.$4,165,000
d.$4,161,500
Accounting standards _____.
A.are rules for preparing financial statements
B.define the levels of tax-payments needed
C.specify the rules for performing an audit
D.refer to the technical process of balancing accounts
decentralization of production is appropriate when _____.
a.a products value-to-weight ratio is high
b.the product serves universal needs
c.barriers to trade are low
d.volatility in key exchange rates is expected
foley company issued $400,000 of 6%, 5-year bonds at 98, which pays interest
annually. assuming straight-line amortization, what is the total interest cost of the
bonds?
a.$120,000
b.$128,000
c.$112,000
d.$116,000
in all of the following scenarios, the costs of doing business in a country tend to be
greater, except where:
a.political payoffs are required to gain market access
b.supporting infrastructure is lacking
c.local laws set strict standards with regard to environmental pollution
d.there is limits or caps on damage awards
which of the following is a drawback of the eurocurrency market?
a.increased governmental controls
b.high reserve ratio requirements
c.low interest rates on deposits
d.exposure to foreign exchange risk
_____ makes it difficult to evaluate the performance of expatriate managers objectively.
a.cultural relativism
b.internal documentation
c.unintentional bias
d.others-orientation
hogan company has $500,000 of bonds outstanding. the unamortized premium is
$7,200. if the company redeemed the bonds at 101, what would be the gain or loss on
the redemption?
a.$2,200 gain
b.$2,200 loss
c.$5,000 gain
d.$5,000 loss
(a)in general, what are the requirements for the financial statement presentation of
long-term liabilities?
(b)what ratios may be computed to evaluate a companys liquidity and solvency?
bonds are frequently issued at amounts greater or less than face value. describe how the
market rate of interest, relative to the contractual rate of interest, affects the selling price
of bonds.
discuss the benefits and costs of fdi from the perspective of a host country and from the
perspective of the home country.
bonds may be redeemed (retired) before maturity by the issuing corporation. explain
why a company would decide to retire bonds before maturity and the necessary steps to
record the redemption.
explain 3ms main export principles that have made the companys exporting business so
successful.
explain how the strategic role of foreign factories evolves over time.
why should a firm choose exporting as a means of foreign market expansion? discuss
the advantages and disadvantages of exporting.
what is cultural toughness?
discuss the global matrix structure.
explain the difference between fundamental analysis and technical analysis.
explain how trade barriers affect a firms strategy.