Which of the Following Is the Primary Disadvantage of Licensing

question 67

Multiple Choice

Which of the following is the primary disadvantage of licensing as a foreign market entry strategy?

• A) high transportation costs
• B) quality control
• C) It is usually a one-time activity.
• D) A firm loses partial control of its business operations.
• E) A firm in effect "teaches" a foreign company how to produce its proprietary products.

---

Definitions:

Salvage Value

The predicted end-of-life resale worth of an asset after its period of functional utility has ended.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, representing the decrease in value due to wear and tear over time.

Cost of Goods Sold

The immediate expenses related to the manufacturing of products which a business sells, covering materials and workforce.

Depreciation Expense

An accounting method to allocate the cost of a tangible or physical asset over its useful life.