A Variety of Options Are Available for How Multinationals Can

question 13

Multiple Choice

A variety of options are available for how multinationals can go about constructing compensation plans for expatriates. Which of the following popular methods is not correctly defined?

• A) The localization method: paying the expatriate at least 20%-25% more than local employees in similar positions
• B) The balance sheet model: "balancing out" the cost differences between the expatriate's home country lifestyle and their foreign assignment location
• C) The ad hoc approach: the company and its expatriates negotiate on a case-by-case basis to cover the costs inherent in a foreign assignments
• D) The localization method: paying the expatriate essentially the same as local employees in similar positions

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Definitions:

Selling Price

The price at which an item or service is sold to buyers.

Face Value

The nominal or stated value of a security or coin, as printed or stamped on the face of it, and not necessarily its market value.

Significant Influence

A level of control or impact over decisions, operations, or governance in various contexts, including business, politics, and social settings.

U.S. Interest Rates

The rate at which borrowers are charged for borrowing money or the rate earned by investors when lending money, set by central and commercial banks in the United States.