The Advantages of Using a Franchising Strategy to Pursue Opportunities

question 49

Multiple Choice

The advantages of using a franchising strategy to pursue opportunities in foreign markets include

• A)having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees.
• B)being particularly well-suited to the global expansion efforts of companies with multidomestic strategies.
• C)allowing a company to achieve scale economies.
• D)being well suited to companies who employ cross-border transfer strategies.
• E)being well suited to the global expansion efforts of manufacturers.

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Definitions:

Indirect Method

The indirect method is a way of calculating cash flows from operating activities by starting with net income and adjusting for non-cash transactions.

Indirect Method

A way of reporting net cash flow from operating activities by starting with net income and adjusting for changes in balance sheet items.

Direct Method

A accounting approach for creating the cash flow statement, which lists major classes of gross cash receipts and payments.

Operating Activities

Activities related to the day-to-day functions of a business involved in producing and selling its products or services, which are reflected in its cash flow.