Which of the Following Is an Advantage of the International

question 17

Multiple Choice

Which of the following is an advantage of the international model?

• A) It facilitates the transfer of skills from the parent company to the subsidiaries.
• B) It provides maximum latitude to research and development functions.
• C) It provides the opportunity to achieve a low-cost position via scale economies.
• D) It requires a minimum amount of effort and coordination by the parent company.
• E) It provides ultimate control to the subsidiaries.

---

Definitions:

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from the total revenue.

Initial Value Method

An accounting approach where investments are recorded at their initial purchase cost without subsequent adjustment for changes in market value.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements that helps in combining the financial information of parent and subsidiary entities.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.