A Domestic Corporation Considering Expanding into International Markets for the First

question 40

Multiple Choice

A domestic corporation considering expanding into international markets for the first time will typically

• A) start off by implementing a wholly owned foreign subsidiary so it can maintain standards identical to those at home.
• B) consider licensing or franchising its operations.
• C) consider implementing a low risk/low control strategy such as exporting.
• D) form a joint venture with a reputable foreign producer.

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Definitions:

Cash Flow

Total funds inflow and outflow within a business and its effect on liquid assets.

WACC

Weighted Average Cost of Capital; a calculation used to estimate the cost of financing a company's assets, blending debt and equity costs.

MIRR

Modified Internal Rate of Return, which adjusts for the differences in reinvestment rates of a project's cash flows.

Project

A temporary endeavor undertaken to create a unique product, service, or result with defined objectives and constraints.