Which of the Following Is a Drawback of Countertrade

question 87

Multiple Choice

Which of the following is a drawback of countertrade?

• A)It fails to give firms a way to finance an export deal.
• B)It is detrimental to the economy of the importing country.
• C)Developing nations may have trouble raising the foreign exchange necessary to pay for imports.
• D)It requires the firm to invest in an in-house trading department dedicated to arranging and managing deals.

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Definitions:

Productive Capabilities

The potential or capacity of a company or a piece of equipment to produce goods or services.

Double-declining-balance

The double-declining-balance method is a form of accelerated depreciation that doubles the normal depreciation rate, reducing the asset's value more quickly in the early years of its life.

Book Value

The book value of an asset is its original purchase cost minus any accumulated depreciation or amortization, reflecting its recorded value on a company's balance sheet.

Useful Life

The estimated period over which an asset is expected to be usable by a company for its intended purpose.