Which of the Following Is NOT an Advantage to Exporting

question 34

Multiple Choice

Which of the following is NOT an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

• A) fewer political risks
• B) greater agency costs
• C) lower front-end investment
• D) All of the above are advantages.

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Definitions:

Times Interest Earned

Measures a company’s ability to meet interest payments as they come due; computed by dividing the sum of net income, interest expense, and income tax expense by interest expense.

Income Statement

Financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income or loss.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time.

Debt to Assets Ratio

A financial ratio that measures the percentage of a company's assets that are financed by debt, used to gauge a company's financial leverage.