The Advantages of ____, a Market-Entry Strategy, Are Most Apparent

question 83

Multiple Choice

The advantages of ____, a market-entry strategy, are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse.

• A) a consortia
• B) exporting arrangements
• C) strategic understandings
• D) licensing
• E) joint ventures

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Definitions:

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales volume, indicating how a change in sales will affect profits.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.

Contribution Margin Ratio

The percentage of sales that exceeds variable production costs, indicating how much of each sales dollar is available to cover fixed costs and generate profit.

Variable Expenses

Expenses that vary directly with changes in business activities or production levels, similar to variable costs, including items like shipping fees and sales commissions.