Why Do Firms Pursuing Global Standardization or Transnational Strategies Tend

question 19

Multiple Choice

Why do firms pursuing global standardization or transnational strategies tend to prefer establishing wholly owned subsidiaries?

• A) It gives firms sound knowledge of the local markets, culture, and the political environment.
• B) It helps protect competitive advantages based on technology.
• C) It allows firms to use the profits generated in one market to improve its competitive position in another market.
• D) It is the most politically accepted mode of entry into foreign markets.
• E) It has the least costs and risks associated with developing a foreign market.

Understand the basic definitions and types of options, including call and put options.

Comprehend the determinants of an option's value, including intrinsic value and time value.

Recognize the concepts of option pricing models, specifically the Black-Scholes model.

Grasp the financial implications of option-related securities like warrants and convertible bonds.

---

Definitions:

Allowance for Doubtful Accounts

An estimation of the accounts receivable that may not be collected, serving as a contra account to accounts receivable.

Percentage of Receivables Basis

An accounting method to estimate the allowance for doubtful accounts based on the expected uncollectibility of accounts receivable.

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables reported on the balance sheet to reflect the amount expected to be uncollectible.

Percentage of Sales Method

A method used for financial forecasting that predicts future occurrences, such as expenses or inventory needs, based on a fixed percentage of sales.