Which of the Following Is NOT Seen as a Potential

question 3

Multiple Choice

Which of the following is NOT seen as a potential disadvantage to the formation of an intra-company reinvoicing center?

• A)Reinvoicing center personnel may develop expertise in the selection and implementation of foreign exchange hedging techniques.
• B)The company must create an additional corporate unit.
• C)Initial setup costs may be high.
• D)A separate set of books must be kept for this new corporate division.

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Definitions:

Substitute Resource

A resource or product that can be used in place of another to fulfill a similar function or need.

Marginal Revenue Product Curve

A graphical representation showing how the revenue generated from selling an additional unit of a good or service changes as more units are produced.

Purely Competitive Seller

A firm operating in a market where it must accept the prevailing market price and cannot influence it.

Law of Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain at a constant.