Dave Is a Research Analyst at Geo Corp

question 14

Multiple Choice

Dave is a research analyst at Geo Corp., a U.S.-based firm, specializing in organic farm produce. Since the management is considering entering a foreign market, Dave begins to study the risks associated with this move. After gathering sufficient data regarding the internal factors of the new market, he categorizes the risks based on the type. Which of the following is most likely to be considered a political risk?

• A)Marketers of Geo standardizing products based on local market needs
• B)Distribution costs being higher in the market than that in the United States
• C)Laws prohibiting foreign ownership of local firms in the new market
• D)Consumers preferring local goods to foreign products in the new market

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Definitions:

Direct Labor-Hours

The number of hours worked by employees directly involved in the production process.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, based on estimated costs.

Machine-Hours

An indicator of the duration a machine is in use over a specific timeframe.

Selling Price

The amount of money for which a product or service is sold to the customer.