According to Internalization Theory,one of the Drawbacks of Licensing Is

question 103

Multiple Choice

According to internalization theory,one of the drawbacks of licensing is that:

• A) it may result in a firm's technological know-how being restricted to a limited knowledge base and stifles any future development.
• B) it does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.
• C) when a firm allows another enterprise to produce its products under license, the licensee bears the costs or risks.
• D) its use is restricted by the government by imposing tariffs and quotas.
• E) it is less cost-effective than FDI.

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Definitions:

Short-term Investments

Investments typically held for one year or less, intended for quick conversion to cash without a significant risk of loss.

Money Market Accounts

Deposit accounts that offer higher interest rates than regular savings accounts, with limited transaction capabilities.

Petty Cash

A limited fund held in reserve to facilitate the prompt settlement of minor sundry outlays.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value.