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Question
Managing an international business is different from managing a purely domestic business for which of the following reasons?
A) Countries prefer to keep business transactions between domestic partners.
B) The range of problems confronted is wider and more complex.
C) International businesses have an added layer of U.N. regulations.
D) International transactions involve exchanging currencies through each country s treasury.
Answer
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Related questions
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Describe the three exchange rates that can be used to translate foreign currencies into the corporate currency in setting budgets and in the subsequent tracking of performance that Lessard and Lorange pointed out.
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A) reduce transaction costs between subsidiaries.
B) avail tax credit from governments.
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D) reduce the fixed costs of establishing a subsidiary.
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By pooling cash resources centrally, firms can
A) better handle short-term cash needs of subsidiaries.
B) increase liquidity of independent subsidiaries.
C) reduce the total size of the cash pool it must hold in liquid accounts.
D) avoid government-imposed restrictions on capital flows.
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Pooling the cash of all the subsidiaries centrally
A) lowers the interest rate earned.
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Money management decisions attempt to manage the firm s _____ most efficiently.
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B) penalizes distant cash flows too heavily.
C) does not penalize early cash flows enough.
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_____ is the technique financial managers use to try to quantify the benefits, costs, and risks of an investment.
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_____ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.
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B) Trade diversion
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A) enables participants to achieve gains from the free flow of trade.
B) enables participants to achieve gains from the free flow of investment.
C) allows countries to specialize in the production of goods and services that they can produce most efficiently.
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_____ eliminates trade barriers between member nations, adopts a common external policy, and permits factors of production to move freely between member countries but it also requires a common currency, harmonization of members tax rates, and a common monetary and fiscal policy.
A) A free trade area
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A) Treaty of Rome
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