Most Companies Become Involved in Direct Exporting When

question 178

Multiple Choice

Most companies become involved in direct exporting when

• A)foreign governments believe that they will benefit the most from allowing the entry of direct exports.
• B)emerging markets in foreign countries become economically viable.
• C)they believe their volume of sales will be sufficiently large and easy to obtain so that they do not require intermediaries.
• D)the domestic market becomes saturated with competing products and services.
• E)evolving technologies in foreign countries come online.

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Definitions:

ROCE

Return on Capital Employed; an economic metric that evaluates how effectively a firm uses its capital to generate profits.

Variable Costs

Expenses that shift in direct proportion to the amount of production or sales, like labor and materials.

Fixed Costs

Costs that remain consistent for a company irrespective of how much goods or services it produces.

Financial Leverage

Financial leverage is the use of borrowed funds to increase the potential return of an investment.