D080 Unit 5 Test
A German company is considering outsourcing the manufacturing process to Japan. Some of the executive board directors are concerned that the Japanese company may not follow the exact production processes the German company normally uses. Which risk represents this concern?
Loss of control
A global company that makes promotional products, like those for corporate gifts, allows customers to engrave their corporate name and logo onto finished products. The company then ships these products to the customers. Which production process is the company using?
Mass customization
A car manufacturing company manufacturers tires in Countries A, B, and C. Country A has significant political turmoil that has resulted in a lengthy labor strike. Countries B and C have ramped up production resulting in sustained tire production for the company. Which practice has the company used to optimize its production efficiency?
Multinational production
A company in the United States has encountered a financial reporting situation that is not currently addressed by the accounting standards of the country. How should the U.S. company proceed?
Consult with the FASB
Which source of funding uses technology platforms to invite consumers to invest small amounts in support of a business idea or venture?
Crowdsourcing
Which type of risk refers to the impact of random change in the value of one currency with respect to other currencies?
Currency risk
How does the Export-Import Bank of the United States (Ex-Im Bank) help exporters?
By offering financing support for a portion of the export value
Which distribution strategy has grown rapidly due to the increase in e-commerce?
Direct channel distribution
A company would like to obtain the benefits of outsourcing and focus solely on marketing activities and research and development. Which advantage is this company hoping to achieve?
Enhanced core business activities
Which term defines using currency derivatives to reduce potential currency risks due to currency exchange rate movement that could lead to losses for a firm?
Hedging
A multinational company produces a product in a country where the leaders are known for occasional asset seizure. Which risk does the company need to mitigate?
Political risks
Which term refers to the price paid by the buyer to the seller in a currency option contract?
Premium
A company is considering using a direct distribution strategy. What is a disadvantage of this distribution strategy?
Required to arrange for transportation
A global company has decided to adopt a pull business model when expanding to new markets around the globe. What is a distinguishing characteristic of this business model?
Shift in the balance of power from suppliers to customers
A company in the United States is considering a joint venture with a French supplier and needs to learn about the accounting standards used in France. How should the U.S. company approach this situation?
Study the International Financial Reporting Standards (IFRS) online
A company has achieved a monetary advantage by using a fronting loan with a subsidiary in a country with a low corporate income tax rate. Which type of tax situation in this country allows the company to achieve this monetary advantage?
Tax haven
A high-end global computer company concludes that it needs to concentrate on gaining production efficiencies with its manufacturing processes. The company decides to outsource the manufacturing of key strategic parts of its products to Vietnam. Why does this company decide to utilize outsourcing?
To reduce costs
A multinational company moves key production assets to a country with lower tax rates to avoid paying more taxes in the home country. Which type of pricing should be used to reduce taxes during production?
Transfer
A multinational company that is considering making a foreign direct investment is concerned that the new country has an indirect tax in addition to corporate taxes. This would reduce the company's profit. Which type of tax is of concern to this company?
Value-added