Multiply

question 72

Multiple Choice

Multiply:

Recognize the concept of the liability of foreignness and its impact on companies entering new markets.

Identify the factors influencing a company's choice of foreign market entry mode.

Differentiate between equity and nonequity modes of market entry.

Understand the potential advantages and disadvantages of exporting as an entry mode.

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Definitions:

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Residual Income

The amount of income that exceeds the minimum rate of return on a project or investment.

Required Rate Of Return

The minimum percentage return an investor expects to achieve from an investment to make it worthwhile, considering the risk.