One Advantage of Direct Investment When Entering a New Global

question 219

Multiple Choice

One advantage of direct investment when entering a new global market is that

• A)intermediaries have the potential to harm the brand.
• B)the firm entering the foreign market does not have to pay royalties to the government.
• C)the company forgoes control over its product.
• D)the firm has a better understanding of local market conditions.
• E)this method is likely to provide the fewest subsidies from the host country's government.

---

Definitions:

Sales Invoice

A document issued by a seller to a buyer, detailing a transaction's products, quantities, and agreed prices for products or services the seller has provided.

Bank Credit Cards

Financial tools issued by banks that allow users to borrow funds for purchases or cash advances, subject to repayment terms and credit limits.

Cash Sales

Transactions where goods or services are exchanged immediately for cash payment.

Normal Credit Balance

The expected balance on the credit side of an account, based on its accounting function (e.g., liabilities, revenues, and equity accounts).