Which of the Following Is a Most Likely Reason for a Firm

question 11

Multiple Choice

Which of the following is a most likely reason for a firm to enter a licensing agreement?

• A) A licensing arrangement allows firms to enter a foreign market without direct foreign investments.
• B) For a firm to enter into a licensing agreement, it must have substantial capital.
• C) A licensing agreement does not require firms to follow the local laws where they operate.
• D) A licensing arrangement is used only if the firms have strong management skills and marketing strategies in the regions where they operate.
• E) A licensing agreement is a risk free method for firms to expand in foreign markets.

Recognize the concepts of initial public offerings (IPOs) and private placement in business financing.

Understand the advantages and disadvantages of using personal capital and resources in business financing.

Learn about the potential impact of management capabilities and business success on securing financing.

Grasp the significance of strategic business planning and execution in attracting investment and securing loans.

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Definitions:

Accounts Receivable

Funds that customers owe to a company for products or services provided but not yet compensated for.

Inventory Balances

Refers to the total value or quantity of all stock items held by a company at any given time, crucial for managing supply chain and sales.

Accounts Receivable

Accounts receivable is the balance of money due to a firm for goods delivered or services provided but not yet paid for by customers.

Disbursement of Funds

The process of paying out money from a fund or account to various recipients.