Which of the Following Is Not an Advantage of International

question 42

Multiple Choice

Which of the following is not an advantage of international acquisitions over the establishment of a new subsidiary?

• A) The firm can immediately expand its international business.
• B) An international acquisition typically generates quicker cash flows than the establishment of a new subsidiary.
• C) International acquisitions are generally cheaper than the establishment of a new subsidiary.
• D) An international acquisition typically generates larger cash flows than the establishment of a new subsidiary.
• E) All of the above are advantages of international acquisitions.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or sales volume, such as materials and labor directly involved in manufacturing a product.

Units

A measure of quantity used to express the amount of a product, service, or resource, often used in production and inventory contexts.

Pretax Income

Income earned by a company before taxes have been deducted.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and sales commissions.