In Which of the Following Modes of Licensing Does the Firm

question 9

Multiple Choice

In which of the following modes of licensing does the firm hire local producers to produce the product, giving the company less control over the manufacturing process?

• A) contract manufacturing
• B) management contracts
• C) direct investment
• D) joint venture production
• E) greenfield venturing

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Definitions:

Return

The fiscal upwards or downwards movement in the value of an investment over a defined period, portrayed as a percentage of the investment’s beginning expense.

Investment

The allocation of resources, usually money, in order to gain profitable returns as interest, income, or appreciation in value.

Present Value

The present worth of a future amount of money, or sequence of cash flows, taking into account a certain return rate, employed in discounting to evaluate investment prospects.

Interest Factor

A multiplier used to calculate the total interest that will accrue on an investment or loan based on the interest rate and time period.