Which of the Following Is a Disadvantage of Direct Exporting

question 18

Multiple Choice

Which of the following is a disadvantage of direct exporting?

• A) The profits of a business will be lower, and control over foreign sales is lost.
• B) The opportunity to tailor its offerings to the customer's evolving needs is lost.
• C) The owner may not be able to respond to customer communications as quickly as a local agent can.
• D) The owner does not know whom to contact if something is not working.
• E) The long-term outlook and goals for an export program can change rapidly, and it is hard to redirect efforts accordingly.

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Definitions:

Return on Equity

A financial ratio that measures the profitability of a firm in relation to its equity, indicating how well a company uses investments to generate earnings growth.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, often referred to as shareholder's equity or owners' equity.

Gross Margin Percentage

A financial metric that measures the proportion of money left over from revenues after accounting for the cost of goods sold, expressed as a percentage.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period.