Which of the Following Is Not True of Licensing

question 19

Multiple Choice

Which of the following is not true of licensing?

• A) Licensing allows a firm to purchase the right to manufacture and sell another firm's products within a specific country or set of countries.
• B) The licensor is normally paid a royalty on each unit sold.
• C) Licensors have considerable control the manufacturing and marketing of their products marketed in foreign countries.
• D) The licensee takes the risks and makes the investments in facilities for manufacturing, marketing and distribution of goods and services.
• E) Licensing is an increasingly popular entry mode for smaller firms with insufficient capital and limited brand recognition.

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Definitions:

Held-to-Maturity Debt Securities

Financial instruments that a company has the positive intent and ability to hold until their maturity date.

Insignificant Influence

A situation where an investor cannot exert control or significant influence over the investee.

Stock Investments

Financial assets representing ownership in companies, which may yield dividends and have the potential for capital appreciation.

Imports Inventory

Imports inventory refers to goods and materials purchased from other countries for resale or use in production.