One Advantage of Direct Investment When Entering a New Global

question 170

Multiple Choice

One advantage of direct investment when entering a new global market is that

• A) intermediaries have the potential to harm the brand.
• B) the firm entering the foreign market does not have to pay royalties to the government.
• C) the company forgoes control over its product.
• D) the firm gains and uses a better understanding of local market conditions.
• E) this method is likely to provide the fewest subsidies from the host country's government.

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Definitions:

Net Income

The amount of profit remaining after all operating expenses, taxes, and interest have been subtracted from total revenue.

All Expenses

Refers to the total costs incurred by a business in its operations, encompassing both fixed and variable expenses.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made at specific intervals, rather than continuously tracking each sale or purchase.

Cost Of Merchandise Sold

The total cost incurred by a business to sell its products, including the purchase price and other expenses directly related to procurement.