One Advantage of Direct Investment When Entering a New Global

question 170

Multiple Choice

One advantage of direct investment when entering a new global market is that

• A) intermediaries have the potential to harm the brand.
• B) the firm entering the foreign market does not have to pay royalties to the government.
• C) the company forgoes control over its product.
• D) the firm gains and uses a better understanding of local market conditions.
• E) this method is likely to provide the fewest subsidies from the host country's government.

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Definitions:

Property Damage

Physical harm or destruction caused to someone's property, including buildings, vehicles, and personal possessions.

Personal Injury

Physical or psychological harm caused to an individual due to another's negligence or intentional act.

Agency Relationship

A legal and fiduciary relationship between two parties, where one, the agent, is authorized to act on behalf of the other, the principal, in business transactions.

Liability

A legal obligation or responsibility to settle a debt or make good on a promise or contract.