QUESTION Commercial banks and major accounting firms are rarely willing to assist small firms in starting export operations due to high default risks. Indicate whether the statement is true or false. ANSWER FALSE Commercial banks and major accounting firms are more willing to assist small firms in starting export operations than they were a […]
QUESTION The risk of failure of an acquisition can be reduced by: A. undervaluing the assets of an acquired firm. B. ensuring that firms are acquired in the home country. C. replacing high-level managers of an acquired firm. D. a detailed auditing of operations, financial position, and management culture. E. investing only in a firm […]
QUESTION Exporting is often not an end in itself, but merely a step on the road toward establishment of foreign production. Indicate whether the statement is true or false. ANSWER TRUE It is important for the exporter to retain the option of local production. Once exports reach a sufficient volume to justify cost-efficient local […]
QUESTION To reduce the risks of failure of an acquisition, managers must: A. pay more for the acquired unit to please its existing employees. B. encourage and facilitate management turnover. C. acquire a firm without wasting time on screening. D. move rapidly after an acquisition to put an integration plan in place. E. ensure that […]
QUESTION A letter of credit may reduce an importer’s ability to borrow funds for other purposes Indicate whether the statement is true or false. ANSWER TRUE A letter of credit has some drawbacks for an importer. Since the letter of credit is a financial liability against an importer, it may reduce the ability to […]
QUESTION Which of the following is a disadvantage of greenfield ventures? A. They have a higher potential for throwing up unpleasant surprises. B. It is much more difficult to build an organizational culture from scratch than to change the culture of an existing unit. C. Companies find it difficult to avoid falling into the trap […]
QUESTION A draft, an instrument normally used in international commerce to effect payment, is also known as a letter of credit. Indicate whether the statement is true or false. ANSWER FALSE A draft, sometimes referred to as a bill of exchange, is the instrument normally used in international commerce to effect payment. A draft […]
QUESTION Only large companies have benefited significantly from the moneymaking opportunities of exporting. Indicate whether the statement is true or false. ANSWER FALSE Exporting is not just for large enterprises; many small firms have benefited significantly from the moneymaking opportunities of exporting.
QUESTION Issued by a bank at the request of an importer, a bill of lading states that the bank will pay a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents Indicate whether the statement is true or false. ANSWER FALSE A letter of credit, abbreviated as […]
QUESTION If a firm is considering entering a country where incumbents exist, and if the competitive advantage of the firm is based on the transfer of organizationally embedded competencies, skills, routines, and culture, what would be the preferable mode of entry? A. Greenfield venture B. Joint venture C. Licensing agreement D. Franchising deal E. Turnkey […]
