One Advantage of Direct Investment When Entering a New Global

question 170

Multiple Choice

One advantage of direct investment when entering a new global market is that

• A) intermediaries have the potential to harm the brand.
• B) the firm entering the foreign market does not have to pay royalties to the government.
• C) the company forgoes control over its product.
• D) the firm gains and uses a better understanding of local market conditions.
• E) this method is likely to provide the fewest subsidies from the host country's government.

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Definitions:

Straight-Line Method

A method of calculating depreciation for accounting purposes where an asset's cost is evenly distributed over its useful life.