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.

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Definitions:

Segments

Differentiable parts of a company that can be identified by specific financial information and operations, often used for reporting purposes.

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a framework of accounting standards, principles, and procedures used in compiling financial statements.

LIFO Method

"Last In, First Out," an inventory accounting method where the most recently acquired items are assumed to be sold first.

Journal Entries

The individual records of financial transactions in a company's accounting system.