Scenario - the Renna Company

question 5

Multiple Choice

Scenario - The Renna Company
Established in 1956,the Renna Company has always maintained its operations within the boundaries of the United States.Originally based in Lexington,Kentucky,this company has now expanded operations into thirteen other U.S.states.While it's inexpensive and efficient cooling and heating products are in high demand even in foreign markets,this company contends it has no desire for international expansion.
Conducting operations strictly within the U.S.borders does not appear to have limited this company overly much.It realized net profits of two billion dollars last year and provided gainful employment for over four thousand workers.The leaders of the Renna Company realize greater profits could be attained through international expansion.However,they stand in agreement when they state,"It is not always the money that best defines the worth of an organization."
The company desire to stay true to its mission statement,which claims,"It will serve the marketplace of the United States with its superior products and provide job opportunities with a fair wage for its employees." The Renna Company is very proud of its products and enjoys the fact they are produced and sold in the United States of America.This company truly reflects the success possible when holding to the fact that "Made in America" is still a winner.
-All of the following are examples of counterarguments the Renna Company should consider before continuing with their stand of keeping their operations strictly within the borders of the United States except which one?

• A) Global expansion affords a strong potential for costs of both product production and product purchase to decrease.
• B) Life expectancy may increase for members of the population within the nations involved in globalization due to the increased quality of life.
• C) Globalization contributes to faster economic growth for the nations involved.
• D) The quality of life is most likely to improve for the citizens of the nations that are involved with globalization and trade.
• E) The wage levels of each nation may become stagnant and some workers may become displaced,having been replaced by less expensive foreign labor.

---

Definitions:

Operating Cycle

The duration between a company's purchase of inventory and the receipt of cash from accounts receivable.

Accounts Receivable Period

The average number of days it takes for a business to receive payments owed by its customers for goods or services provided.

Inventory Period

The average time that inventory is held before it is sold or used in production.

Operating Cycle

Refers to the duration it takes for a company to buy goods or services, convert them into products, sell those products, and collect cash from the sales.