In a Manufacturing Setting, the Purchase of the Right to Use

question 7

Short Answer

In a manufacturing setting, the purchase of the right to use another firm's proprietary technology is referred to as:
a. Direct exporting.
b. Licensing.
c. Franchising.
d. Exporting.
e. Importing.

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Definitions:

Secondary Markets

Markets where investors buy and sell securities or assets that have already been issued or owned, such as the stock market.

Common Stock

An ownership stake in a company, signified by equity securities, granting the holder voting rights on corporate issues and entitlement to dividends.

Agency Problems

Conflicts of interest that arise when agents (managers or executives) make decisions that benefit themselves rather than the principals (shareholders) they are supposed to represent.

Sole Proprietorships

A company that is both owned and managed by one person, where there is no legal separation between the proprietor and the business itself.