Fin426, Chapter1 Testbank Questions

 Essay about Fin426, Chapter1 Testbank Inquiries

CHAPTER 1

Introduction

EASY (factual)

1 ) 1Historically, the principal motive to get U. S. multinationals to generate abroad have been to a. spend less

b. respond more quickly towards the marketplace

c. avoid transact barriers

m. gain tax benefits

RESPONSE: b: g. 8, evolution of international

1 . 2The primary objective of the multinational corporation should be to

a. take full advantage of shareholder prosperity

m. maximize globe production

c. minimize debt

d. reduce the cost of conducting business globally

SOLUTION: a: p. 21, Multinational Financial Management: Theory and Practice

1 . 3____________ is defined as the getting assets or perhaps commodities using one market to get immediate reselling on another in order to profit form an amount discrepancy. a. internationalization

w. arbitrage

c. financing

deb. total risk

ANSWER: n: p. 8, evolution of multinational

1 . 4The value of good economical management is definitely ___________ inside the global markets because of the much greater probability of market flaws and multiple tax prices. a. reduced

b. neutralized

c. increased

d. arbitraged away

RESPONSE: c: g. 26, function of the financial executive

1 . 5When a firm operates internationally it offers advantages such as a. better political power at home

b. less taxes on it is profits

c. greater discussing power with foreign group groups

m. greater discussing power with labor assemblage

ANSWER: m: p. a few, rise from the multinational

1 . 6The primary transmitter of global competitive makes is the a. public utility firm

m. financial administration experience of the U. H. markets

c. the multinational corporation

d. the Federal Hold System of the U. S i9000.

ANSWER: c: p. 3, rise in the multinational

1 . 7___________ were the earliest multinationals.

a. raw-material seekers

n. market searchers

c. expense minimizers

m. oil businesses

e. the Federal Reserve System of the U. S.

ANSWER: a: p. 10, raw material seekers

1 . 8The ___________ are the archetype of the modern multinational organization that goes offshore to produce promote in foreign markets. a. cost minimizers

b. marketplace seekers

c. raw-material searchers

d. whaling companies

SOLUTION: b: g. 10, market seekers

1 ) 9___________ certainly are a recent category of multinationals that seek out and invest in lower cost production sites abroad.

a. Expense minimizers

b. Market seekers

c. Raw-material seekers

deb. High tech companies

ANSWER: a: p. 10 cost minimizers

1 . 10Which one of the subsequent is a outcome of improved global competition? a. the creation of new steel plants in the older industrial countries b. the conclusion of free-trade agreements between governments of the world c. improved comfort level of trade assemblage with the effects d. elevated anxiety among workers in the old commercial countries ANSWER: d: s. 18, Effects of Global Competition

1 . 11The defenders of multinationals think that __________ are the appropriate prize for efficiently providing a global economy with products and services. a. profits

w. subsidies

c. tax holidays

d. low-interest, government-subsidized loans

ANSWER: a: p. twenty two Criticisms of the Multinational Corporation 1 . 12International ________ may reduce the unpredictability of an investment portfolio since national economical markets are likely to move individually of each various other. a. accommodement

b. centralization of the MNC's cash

c. diversification

d. investment

RESPONSE: c: p. 26, The Importance of Total Risk

AVERAGE (applied)

1 . 13Into which will category of multinational is IBM most likely to fall?

a. raw materials seeker

b. industry seeker

c. price minimizer

d. all the above

RESPONSE: b: p. 10, marketplace seeker

1 . 14Which one of many following accelerated the growth in the global overall economy in the past 10 years? a. the U. H. -Canada-Mexico free-trade pact

m. the creation of the Eu

c. China's entrance into the WTO

deb. All of the over

ANSWER: d: p. nineteen, Consequences of Global Competition

1 . 15The multinational financial system enables companies to

a. steer clear of currency...


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