Which of the Following Is a Major Disadvantage of Direct

question 21

Multiple Choice

Which of the following is a major disadvantage of direct investment for the domestic company?

• A)The returns are lesser as compared to exporting.
• B)Generally, the firm finds it difficult to develop a deeper relationship with the government or customers.
• C)The firm eventually loses control over the investment.
• D)The firm faces many risks such as falling markets or government changes.
• E)Due to a lack of control, the firm is unable to develop marketing policies that serve its long-term international objectives.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the expected costs based on the standard variable overhead rate.

Materials Quantity Variance

The deviation between the realized quantity of materials consumed in production and the forecasted quantity, multiplied by the set cost per unit.

March

The third month of the year in the Gregorian calendar, known for marking the change from winter to spring in the Northern Hemisphere.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (standard) cost.