Dispersing the Performance of Value Chain Activities to Many Different

question 17

Multiple Choice

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous

• A) when high transportation costs make it expensive to operate from central locations.
• B) whenever buyer-related activities are best performed in locations close to buyers.
• C) if diseconomies of large size exist,thereby making it more economical to perform an activity on a smaller scale in several different locations.
• D) when it is desirable to hedge against (1)the risks of fluctuating exchange rates (such risks are greater when activities are concentrated in a single location)or (2)supply interruptions (due to strikes,mechanical failures,or transportation delays)or (3)adverse political developments.
• E) All of these.

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Definitions:

Federal Tax Bracket

Federal tax brackets are ranges of income to which different tax rates apply, forming part of the U.S. progressive tax system.

After-tax Yield

The return on an investment after the effects of income taxes are taken into account, reflecting the actual gain to the investor.

Corporate Bond

A debt security issued by a corporation to raise funding, which promises to pay back with interest.

Annuities

Financial products that provide a stream of payments over time to the holder, often used for retirement purposes.