__________ Takes Advantage of International Wage Gaps by Contracting for Low-Cost

question 27

Multiple Choice

__________ takes advantage of international wage gaps by contracting for low-cost goods and services in foreign locations.

• A) Insourcing
• B) Exporting
• C) Global sourcing
• D) Reshoring

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Definitions:

Debt

An amount of money borrowed by one party from another, under the condition of repayment with interest.

Interest Tax Benefit

The financial advantage gained through deducting interest payments on debt from taxable income.

MM Model

Modigliani-Miller Model; a theory on capital structure that suggests the market value of a firm is determined by its earning power and the risk of its underlying assets.

Tax-Deductibility

Pertains to expenses that can be subtracted from gross income to reduce the total taxable income, thereby lowering the amount of tax owed.