Review the Following Statements to Determine Which One Is Not

question 136

Multiple Choice

Review the following statements to determine which one is not accurate regarding the direct ownership method of entering a foreign market.

• A)Direct ownership requires more commitment than any other method of entering a foreign market.
• B)Direct ownership is a good option when there is very little political risk.
• C)Direct ownership is the riskiest method of entering a foreign market.
• D)Direct ownership does not allow the firm much control over its intellectual property.
• E)Direct ownership is a good option when there are similarities between the foreign and domestic cultures.

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Definitions:

Contractual Interest Rate

The agreed-upon interest rate specified in a loan or bond contract, which the borrower must pay to the lender.

Market Interest Rate

The prevailing rate of interest determined by supply and demand in the financial markets.

Straight-Line Method

A method of depreciation that allocates an equal amount of the depreciable cost of an asset to each year of its useful life.

Carrying Value

The net amount at which an asset or liability is reported on the balance sheet, calculated as original cost minus any depreciation, amortization, or impairment costs.