Why Would a Firm Establish a Sales and Service Infrastructure

question 41

Multiple Choice

Why would a firm establish a sales and service infrastructure in a country where it wanted to sell its products?

• A)Establishing an infrastructure in a country is the easiest way to develop a market for the products in that country.
• B)Establishing an infrastructure in a country may be necessary if the product being sold requires after-sale service.
• C)Establishing an infrastructure in a country is a long-term strategy that promises the most success for the firm.
• D)Establishing an infrastructure in a country is the only way to gain the exposure necessary to successfully sell the firm's products.

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Definitions:

Principal

The original sum of money borrowed in a loan, or the amount of the loan that has not yet been repaid, excluding interest.

Straight-Line Method

A depreciation technique that allocates an equal portion of an asset's cost to each period of its useful life.

Interest Expense

The cost incurred by an entity for borrowed funds, represented as a charge against earnings in the income statement.

Interest Payable

The amount of interest that has been incurred on borrowed funds that a company must pay, typically represented as a current liability on the balance sheet.