Which of the Following Statements Is True of a Company

question 32

Multiple Choice

Which of the following statements is true of a company that is in the second stage of developing a global business?

• A) It maintains a virtual executive suite.
• B) It sets up foreign subsidiaries to handle sales in one country.
• C) It runs its business entirely through the Internet.
• D) It bases its entire operations in its home country.

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Definitions:

Payables Deferral Period

The average length of time between a firm’s purchase of materials and labor and the payment of cash for them. It is calculated by dividing accounts payable by credit purchases per day (cost of goods sold/365).

Line of Credit

A flexible loan arrangement with a financial institution that allows a borrower to draw upon funds up to a specified limit at their discretion.

Financial Strength

The ability of an entity to meet its financial obligations, often evaluated through metrics like liquidity ratios, solvency ratios, and profitability.

Public Warehouse Agreement

A contract between a warehouse owner and a renter specifying the storage, handling, and management of goods in a public warehouse.