Which of the Following Is a Disadvantage of a Strategic

question 25

Multiple Choice

Which of the following is a disadvantage of a strategic alliance?

• A)Entering into a strategic alliance makes it difficult for a firm to enter into a foreign market.
• B)As a result of strategic alliance,fixed costs of developing new products tend to increase.
• C)Strategic alliance gives competitors a low-cost route to new technology and markets.
• D)Firms that enter into a strategic alliance with a foreign firm tend to face higher trade barriers.
• E)Strategic alliance always leads to a loss to either of the firms involved.

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Definitions:

Manufacturing Costs

Expenses directly related to the production of goods, including raw materials, labor, and factory overhead.

Tax Rate

The rate at which income is taxed for a person or business entity.

Net Income

Net income refers to the total profit of a company after all expenses and taxes have been subtracted from total revenue.

CCA Tax Shield

A tax benefit derived from the depreciation expense allowed on tangible property for tax purposes, reducing taxable income.