new processes that might lead to a competitive advantage can be developed anywhere
within the organizations global network of operations.
Payment of dividends is an uncommon method of transferring funds from foreign
subsidiaries to the parent company.
a seminal study, r. l. tung, revealed that for european firms, the top reason for expatriate
failure was the inability of the manager to cope with larger overseas responsibilities.
the world trade organization was created as part of the uruguay round.
foreign credit insurance association is a part of the u.s department of commerce and
guides the activities of the export-import bank.
countertrade is an alternative means of structuring an international sale when
conventional means of payment are difficult, costly, or nonexistent.
the value systems and norms of a country are unrelated to the costs of doing business in
that country.
the base for the purchasing power parity adjustment of the gni is the cost of living in the
united states.
other things being equal, a firm should locate its various manufacturing activities where
the relative factor costs are conducive to the performance of those activities.
one benefit of a shorter channel is that it cuts selling costs when the retail sector is very
fragmented.
unearned revenues should be classified as other revenues and gains on the income
statement.
consumers in the most developed countries are typically willing to sacrifice their
preferred product attributes for lower prices.
A firms ability to establish a centralized depository that can serve short-term cash needs
might be limited by government-imposed restrictions on capital flows across borders.
direct contact between subunit managers is the simplest integrating mechanism.
establishment of the euro created the largest currency zone in the world, replacing the
position the u.s. dollar had held for decades.
specific tariffs are:
a.levied as a proportion of the value of the imported good
b.government payment to domestic producers
c.in the form of manufacturing or production requirements of goods
d.levied as a fixed charge for each unit of a good imported
on january 1, 2011, asianic inc. issued 10-year bonds with a face amount of 20,000,000
and a contract rate of 8% payable annually on january 1. the effective-interest rate on
the bonds is 10%. present value factors are as follows:
total issue price of the bonds was
a.20,000,000
b.19,600,000
c.18,400,000
d.17,552,000
a _____ is simply an order written by an exporter instructing an importer, or an
importers agent, to pay a specified amount of money at a specified time.
a.letter of credit
b.bill of lading
c.draft
d.bankers letter
a _____ is an asset whose value is contingent upon a particular relationship persisting.
a.specialized asset
b.balanced asset
c.universal asset
d.supplementary asset
_____ are sold outside of the borrowers country and are denominated in the currency of
the country in which they are issued.
a.micro bonds
b.eurobonds
c.foreign bonds
d.regulatory bonds
scribner company issued $200,000 of 8%, 5-year bonds at 106. assuming straight-line
amortization and annual interest payments, how much bond interest expense is recorded
on the next interest date?
a.$16,000
b.$18,400
c.$13,600
d.$2,400
the person or business initiating a draft is known as the ____.
a.beneficiary
b.drawee
c.maker
d.trustee
in theory, the advantage of emcs is that they are __________________.
a.managed by governments that provide export subsidies
b.not-for-profit organizations that provide free service
c.subsidized by the department of commerce
d.experienced specialists who can help the neophyte exporter
which of the following is not a successful exporting strategy used by 3m?
a.add additional products once exporting becomes successful
b.enter many markets at one time to gain maximum exposure
c.hire local to promote the firms products
d.enter on a small scale to reduce risks
bp, one of the worlds largest oil companies, has made it part of the company policy to
undertake social investments” in the countries where it does business. there was no
economic reason for bp to make this social investment, but the company believes it is
morally obligated to give something back to the societies that have made their success
possible. bps actions are an example of:
a.cultural relativism
b.the friedman doctrine
c.noblesse oblige
d.the tragedy of the commons
a bond with a face value of $200,000 and a quoted price of 98 has a selling price of
a.$196,500
b.$196,100
c.$196,010
d.$197,000
Which of the following is a disadvantage of pursuing a transfer pricing policy?
A.It is not useful in shifting earnings from a high-tax country to a low-tax one.
B.Transfer pricing does not treat each subsidiary as a profit center.
C.It is not effective when significant currency devaluation is expected.
D. A transfer price policy cannot be used to move funds when dividends are restricted.
In countries such as the United States and Britain, firms typically raised capital by
_____.
A.obtaining funding from the government
B.borrowing money from national banks
C.issuing stock or bonds to investors
D.borrowing money from international banks
ervay company has $750,000 of bonds outstanding. the unamortized premium is
$10,800. if the company redeemed the bonds at 101, what would be the gain or loss on
the redemption?
a.$3,300 gain
b.$3,300 loss
c.$7,500 gain
d.$7,500 loss
which of the following is an advantage of establishing a joint venture?
a.joint ventures with local partners do not face any risk of being subject to
nationalization or other forms of adverse government interference
b.joint ventures give a firm a tight control over subsidiaries that it might need to realize
experience curve or location economies
c.when the development costs and/or risks of opening a foreign market are high, a firm
might gain by sharing these costs and or risks with a local partner
d.the firm is deprived of the knowledge of the host countrys competitive conditions,
culture, language, etc
what will happen, according to paul samuelsons critique, if a rich country enters into a
free trade agreement with a poor country?
a.both the countries will incur losses due to the exchanges between them
b.the productivity of the poor country will decline rapidly
c.the poor country will rapidly improve its productivity
d.both the countries will garner benefits from the exchanges between them
sparks company received proceeds of $211,500 on 10-year, 8% bonds issued on january
1, 2011. the bonds had a face value of $200,000, pay interest annually on december
31st, and have a call price of 102. sparks uses the straight-line method of amortization.
what is the amount of interest sparks must pay the bondholders in 2011?
a.$16,920
b.$16,000
c.$16,320
d.$1,692
the costs of promoting and establishing a product offering when a firm enters a foreign
market prior to its rivals are known as ____.
a.switching costs
b.market development costs
c.pioneering costs
d.promotional development costs
the interest charged on a $50,000 note payable, at the rate of 6%, on a 60-day note
would be
a.$3,000
b.$1,500
c.$750
d.$500
a civil law system tends to be less adversarial than a common law system because ____.
a.the judges decisions are based on detailed legal codes
b.the judges have the freedom to interpret laws based on the situation
c.the judges decisions are based on religious teachings
d.the judges are guided by interpretations made in prior legal cases