A Business Will Be Likely to Borrow to Fund Projects

question 13

Multiple Choice

A business will be likely to borrow to fund projects if:

• A)the rate of return on the project is less than the interest rate on the loan.
• B)the project will produce a good or service that is in high demand.
• C)the rate of return on the project is at least as high as the interest rate on the loan.
• D)the minimum efficient scale will be attained.

Assess the impact of exporting and licensing on a company's international expansion efforts.

Distinguish between different internationalization entry tactics including "make," "buy," "ally," and others.

Recognize the role of contractual relationships and alliances in international business.

Explain the disadvantages associated with specific entry modes, such as joint ventures and exporting.

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Definitions:

Non-Public Firms

Companies that do not have their stock traded on public stock exchanges and are typically privately owned.

Shareholders

Individuals or entities that own one or more shares of stock in a public or private corporation, making them partial owners of the company.

Takeover

The acquisition of control over another company, either through purchasing a majority stake of shares or by other means.

Leveraged Buyout

An acquisition of a company using a significant amount of borrowed money to meet the cost of acquisition.