Maintaining Low Fixed Costs and High Variable Costs Rather Than

question 46

Multiple Choice

Maintaining low fixed costs and high variable costs rather than high fixed costs and low variable costs:

• A) Is a more conservative cost structure
• B) Is a more risky cost structure
• C) Is an equally risky cost structure
• D) Results in a higher contribution margin

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Definitions:

Global Marketplace

An international system for the exchange of goods, services, and capital across world markets, where businesses operate and compete on a worldwide scale.

Direct Investment

An investment made to acquire a lasting interest in or effective control over an enterprise in another country.

Exporting

The act of selling goods or services produced in one country to buyers in another country.

Market Entry

The strategy or methodologies used by a company to start selling its products or services in a new market or country.