Shippers Co

question 9

Essay

Shippers Co.is considering an expansion into the United States.Kellie Sharma, the CEO, is not sure whether to structure this new venture as a branch or subsidiary, and would like some general information before meeting with the accountant and lawyer.(Kellie does not want to use the direct sales method.)
Required:
List two advantages and disadvantages for an expansion using a branch.
A.List two advantages and disadvantages for an expansion using a subsidiary.

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Definitions:

Output Increases

A rise in the amount of goods or services produced by an entity.

Average Costs

The total cost of production divided by the number of goods produced; it decreases as production increases.

Average Costs

The average expense associated with producing a good or service, typically calculated by dividing the total costs by the quantity of goods or services produced.

Output Increases

A situation where the production level of goods or services in an economy or firm rises.