If a Technology Transfer Agreement Is Interpreted Under Local Law

question 13

Multiple Choice

If a technology transfer agreement is interpreted under local law as a "sale" rather than as a temporary "lease," then:

• A) The licensor will make far greater profits on a sale than under a lease.
• B) At the end of the term of the agreement, the licensor will lose rights in the technology in the foreign country.
• C) The licensee will be free to resell the technology to firms in other countries during the time the agreement is in effect.
• D) Royalty payments will not be permitted to be made.

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Definitions:

Fixed Costs

Expenses that do not change with the level of output or sales, such as rent, salaries, and insurance.

Fixed Cost

A cost that does not vary with the level of output or sales, such as rent, salaries, and insurance premiums.

Overhead Cost

Indirect expenses related to the operation of a business, such as rent, utilities, and administrative salaries, that are not directly tied to the production of goods or services.

Total Revenue

The complete amount of income generated by a business from its sales or services before any costs or expenses are subtracted.