Labor Cost Advantages Gained by Moving into a Country with Low

question 40

Multiple Choice

Labor cost advantages gained by moving into a country with low wages may be short-lived because ________.

• A)transport costs go up to cancel out the cost savings
• B)tax increases cancel out all labor cost differentials
• C)rivals adopt capital-intensive production methods
• D)competitors follow leaders into low-wage areas

Recognize different customer profitability analysis categories.

Identify the factors that influence customer profitability, including networking and learning potential.

Grasp the importance of customer relationship management and the role of customer portfolios.

Realize the significance of word-of-mouth in acquiring new customer relationships.

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Definitions:

Dividend Payments

The portion of a company's earnings that is distributed to shareholders, usually in the form of cash or additional shares.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business, reflecting the company's operational, investing, and financing activities.

Financing Activities

Transactions and business events that affect long-term liabilities and equity of a company, including issuance of shares, buyback of shares, and loans taken or given.

Operating Activities

Business activities directly related to the production and delivery of goods and services.