Exporting Has Two Distinct Advantages - It Avoids the Cost

question 52

Multiple Choice

Exporting has two distinct advantages - it avoids the cost of establishing manufacturing operations in the host country, and

• A) it reduces the product cost.
• B) helps a firm achieve experience-curve and location economies.
• C) minimizes production errors.
• D) creates a ready market to set up production units at a later time.

---

Definitions:

Budget Slack

The intentional underestimation of revenues or overestimation of expenses within a budget to create a cushion for unexpected situations.

Employee Self-interests

Employee self-interests are the motivations and personal goals that drive the behaviour of individuals within an organization, which may or may not align with the company's objectives.

Cash Receipts

The collection of cash, typically by a business from its customers, for goods or services provided.

Credit Sales

Credit sales are transactions where the customer purchases goods or services with an agreement to pay at a later date.