One Disadvantage of Direct Investment When Entering a New Global

question 127

Multiple Choice

One disadvantage of direct investment when entering a new global market is

• A) intermediaries have the potential to harm the brand.
• B) the firm entering the foreign market must pay royalties to the government.
• C) the company forgoes control over its product.
• D) the financial commitments involved.
• E) this method is likely to provide the fewest cost savings relative to the other global market entry options.

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Definitions:

Cashed

Processed or exchanged for its value in money, typically referring to a check being turned into cash.

Restrictive Endorsement

A limitation placed on a check specifying the conditions under which it can be endorsed.

Special Endorsement

A banking term referring to a notation on a check or other negotiable instrument that specifies the conditions under which it can be redeemed or transferred.

Qualified Endorsement

A legal notation on a negotiable instrument, such as a check, restricting the conditions under which it can be further negotiated.