Which Mode of International Entry Is Prestwick House Using If

question 24

Multiple Choice

Which mode of international entry is Prestwick House using if it handles the design, construction, start-up operations and workforce training of a foreign plant?

• A) Strategic alliance
• B) Joint venture
• C) Exporting
• D) Turnkey project

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Definitions:

Internal Rate of Return

The discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Average Rate of Return

A monetary measurement for assessing an investment's profit efficiency, determined by dividing the yearly average profit by the cost of initial investment.

Cash Payback

A capital budgeting method that estimates the time required for an investment to generate cash flows sufficient to recover its initial cost.