In the Context of Companies Entering Foreign Markets, Which of the Following

question 54

Multiple Choice

In the context of companies entering foreign markets, which of the following statements is true of the liability of foreignness?

• A) Companies doing business in countries that are geographically proximate face a small liability of foreignness.
• B) Companies doing business in countries that are economically dissimilar face a small liability of foreignness.
• C) Companies doing business in countries that share a common cultural base face a large liability of foreignness.
• D) Companies doing business in countries that have few administrative differences face a large liability of foreignness.

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Definitions:

Accounts Payable

The amount of money that a company owes to its creditors for goods or services that it has received but not yet paid for.

Marginal Tax Rate

The rate at which an additional dollar of income would be taxed, representing the individual's tax bracket.

Depreciation Life

The period over which a fixed asset is expected to depreciate until it reaches its salvage value.

Market Value

The ongoing rate at which you can buy or sell an asset or service within the open market.