A USFirm Is Acquiring an Existing Company in Germany Rather Than

question 1

Multiple Choice

A U.S.firm is acquiring an existing company in Germany rather than starting up a new foreign operation.Which of the following statements best supports this decision?

• A)Because the German firm is performing poorly, there is a good turn-around opportunity.
• B)The U.S. firm's U.S. facility is working at capacity.
• C)Stock market prices have been very high in Germany.
• D)The German firm has skilled personnel that the U.S. firm cannot hire at a good price on its own.

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Definitions:

Most Favoured Nation Status

A status that gives a trading partner most favorable treatment for imports and exports.

Quotas

are set limits or targets that need to be achieved within a specified timeframe, commonly used in sales, production, and policy implementation.

Political Risk Analysis

The process of assessing and evaluating the potential risks involved in a business's operations due to political decisions, conditions, or events.

Political Disruptions

are events or actions that cause significant changes or interruptions to the usual political activities and processes, potentially leading to instability.