Luis Is a Partner in a Firm That Specializes in Producing

question 240

Multiple Choice

Luis is a partner in a firm that specializes in producing vitamins and health food products. While the business is considered small by U.S. standards, he is attempting to persuade his partner to expand internationally. Luis would list which of the following as an advantage of going global?

• A) Exporting can help sell excess inventory.
• B) Marketing programs benefit from the cultural similarities in prospective markets.
• C) Financing can easily be obtained to expand internationally.
• D) Selling your products in other markets reduces their life cycle, making them more attractive.

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Definitions:

Income From Operations

The earnings generated from a company's regular core business operations, excluding deductions of interest and taxes.

Residual Income

A measure of net income after accounting for the cost of capital.

Activity Base

A measure used for allocating fixed costs to products or services based on the amount of activity.

Service Departments

Units within an organization that provide support to the profit-making departments, rather than directly contributing to profits.