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:

Product Margins

The difference between the selling price of a product and the cost of goods sold, representing the profit per unit sold.

Activity Cost Pools

Aggregations of individual costs, categorised based on the activities performed within an organization.

Batches

Batches refer to groups or sets of goods produced at one time, used in manufacturing to describe the production process or in inventory to describe how products are managed.

Product Margins

The difference between the selling price of a product and its production costs.