cba international business chapter 16-18

Nancy Adler's research suggests that women:

have been remarkably successful in international assignments, which does not seem to be related to gender.

Tax liability on foreign earnings is controlled by:

how the foreign operations of a company are organized.

Assumptions that underlie a country's legal, political, and economic systems:

influence accounting, both its practice and the commonly shared understanding of its purpose.

The value-added tax is levied on:

all goods and is indirect, collected from the value adder.

A reason that outsourcing has become an increasingly common option for companies is:

all of A, B, and C.

Qualifications for a good manager of an overseas operation should include:

all of B, C, and D.

The level of technology chosen may be:

all of B, C, and D.

An advantage of hiring personnel who are citizens of neither the home country nor the host country may be that they:

all of above

Home-country nationals may be used in host-country management because:

all of above

Mass customization:

all of the above

According to the text, decisions on the standardization of design are affected by:

all of the above.

Parent-company nationals might be concerned with:

all of the above.

Reasons for sourcing globally include:

all of the above.

The approach to design that promotes cross-functional participation in the design stage:

all of the above.

The effectiveness of every organization depends to a great extent on how well its:

all of the above.

Before accepting a foreign posting and becoming an expatriate, you should:

all the above.

Employee compensation payments added to base salaries because of higher expenses encountered when living abroad are considered:

allowances.

According to the text, approximately ______ percent of the companies surveyed required cross-cultural training for their expats or their families.

21 percent

According to the text, approximately ______ of expatriates leave their firms during the course of their overseas assignment.

25 percent

Reasons for global standardization of manufacturing systems include:

. all of A, B, and C.

According to the text, the proportion of expatriates who are women has increased to _____ percent.

21

According to the text, the failure rate for expatriate assignments, including failing to achieve performance targets for an international assignment or prematurely returning from the assignment, ranges from _______ percent.

25 to 45

In the case of the United States, intrafirm trade accounts for ______ percent of exports of goods.

30 to 40

In the case of the United States, intra firm trade accounts for ___ ___ percent of imports of goods.

35 to 45

A typical company's supply chain costs can represent more than ____ percent of assets.

50

It has been estimated that at least ____________ percent of products currently on the market were not available five years ago, creating additional pressure to locate suppliers worldwide that can provide inputs at competitive prices and quality and with quick responsiveness to market changes.

50

In U.S. industry, the proportion of purchased materials in the overall cost of goods sold has been rising for several decades, to a level of ________ percent today.

55 to 79

Research found that suppliers cut invoice and ordering errors by an average of ___ percent when using an e-marketplace.

69

According to the text, including such items as maintenance, repair, operating supplies, office equipment, and other services and supplies, indirect procurement can account for as much as what percent of the total purchasing expenditures in companies?

70 percent

According to the text, about ____ percent of medium and large-sized companies have employees working abroad.

80

According to the text, approximately ______ of expatriate failures are family-related.

90 percent

What is a controlled foreign corporation?

A subsidiary with the parent company having at least 50 percent ownership and control

The process of transferring value across borders is complex because it involves:

A, B, and C

_____ are paid by firms in recognition of the fact that expatriates and their families undergo some hardships and inconveniences and make sacrifices while living abroad.

Bonuses

These countries prefer debt to equity by large margins:

France, Italy, and Japan.

Why is a currency option sometimes preferred to a forward market hedge?

It is an optional contract, so the company could not exercise it and be able to benefit from upside swings in the foreign currency value. B. The rates are cheaper.

Which of the following is(are) true about assistance provided to the spouses of expatriates?

Nearly 70 percent of companies provide language training to spouses.

What is the purpose of multilateral netting?

To reduce transaction costs and increase efficient use of funds

The U.S. body that establishes accounting standards, the FASB, is:

a private organization.

Income tax is a direct tax levied on earnings, and:

VAT is an indirect tax.

What is the essential difference between an income tax and a VAT?

VAT is indirect; income tax is direct.

According to the text, which of the following is true?

Zara removes its product lines, including ones that have been selling well, every two weeks or so.

Home leave is:

a periodic trip back to the home country made by employees and their families.

Hiring and promoting employees on the basis of the specific local context in which the subsidiary operates refers to:

a polycentric orientation.

Knowledge of foreign languages:

can be of great assistance in making export sales.

In his book Cannibals with Forks, John Elkington puts forward the argument that:

capitalism can become civilized.

Firms have developed international finance centers in order to:

centralize the financial management function and thereby reduce costs and increase both profits and efficiencies.

When a firm offers its stock in a foreign market, it is:

cross-listing.

Part of the problems with international accounting convergence efforts has to do with:

cultural differences in value systems between the EU and the United States.

Swap contracts are agreements to exchange:

currencies at specified rates at specified times in the future.

The capital structure of the firm can be raised externally through:

debt and equity.

Training and development of potential candidates for expatriate assignments:

depend on whether the candidate is a home-, host-, or third-country national.

According to the text:

design is an important factor in the structure of a company's global supply chain.

Economic exposure occurs at the operations level and results from:

exchange rate changes on projected cash flows.

The following conditions led to the establishment of international finance centers:

floating exchange rates and growth in the FX markets.

In a forward market hedge for transaction exposure, the firm sells forward:

foreign currency receivables for the home currency, matched to the due date of the receivables.

The U.S. government's attitude toward transfer pricing on subsidiary transactions in foreign locations is:

interested, because transfer pricing has tax implications for the host governments— hence the IRS guidelines.

ISO 9000:

is a set of five universal standards for a quality assurance system agreed to by the ISO.

Compared to equity financing, debt financing is thought to be:

less expensive, because interest on the debt is usually tax deductible.

For purchases of capital goods such as manufacturing equipment, many U.S. buying organizations now use _______________ to analyze purchasing decisions, including trade-in or future estimated salvage value.

life-cycle costing

. Managerial functions associated with the movement of materials such as raw materials, work in progress, or finished goods are referred to as:

logistics.

Opportunities for corporations to tap into varying international markets exist because:

markets, although interconnected, are not fully integrated.

Elkington suggests that the drivers for triple-bottom-line accounting can be:

markets, values, transparency, life-cycle technology, partnerships, time, and corporate governance.

When an IC hires and trains local, host-country people, the IC often:

may lose them to local firms or other ICs once they are trained.

According to the text, the cost of importing a foreign-sourced product, including freight, insurance, and packing:

may range from 10 to 12 percent of the cost of the product.

A regiocentric staffing policy:

may send TCNs to fill management posts, to avoid problems from using PCNs or HCNs.

The major argument against 3BL is that:

measurement won't get us closer to the desired state.

The cash flow management of a global firm, compared to that of a domestic firm, is:

more complex, because currencies vary, as do national-level regulations.

Transfer pricing may serve as a vehicle for:

moving profits and blocked royalties from high-tax to low-tax subsidiaries.

Exposure netting is a transaction exposure hedging technique that is similar to:

multilateral netting.

An ethnocentric staffing policy:

none of above

For cost-of-living allowances, the U.S. State Department index:

none of above

Leading and lagging is a practice:

of timing, leading with receivables in a weakening currency and payables in strengthening currencies.

Offshore financial centers are appealing to the international firm because they:

offer reduced regulations and lower taxes than in the home country.

The centerpiece of Cognizant Technology Solution's operations is the company's innovative ________________ business model.

offshore-onshore

Relocating some or all of a business's activities or processes to a foreign location is:

offshoring.

A foreign currency sale is recorded as revenue, using the exchange rate:

on the date of the sale.

In the current rate method, assets and liabilities are translated:

on the date the balance sheet is produced.

Hiring others to perform some of the noncore activities and decision making in a company's value chain, rather than having the company and its employees continue to perform these tasks, is:

outsourcing.

A traditional approach to product design that involves a sequential approach to design has been termed:

over the wall.

ADRs are a way for non-U.S. firms to:

participate in local U.S. equity markets without incurring the need for a broker or foreign exchange.

Generalizations about TCNs are difficult because:

people achieve the TCN status in different ways.

Regarding repatriation:

planning for an expat's return should start while the employee is abroad.

Quality control in foreign affiliates from the home office is less difficult when:

production equipment is similar.

A fronting loan enables the firm to:

protect itself from the risk of blocked asset transfers, such as remittances, loan payments, and profit repatriations.

In debt markets, the corporate trend is to:

raise debt capital in the local markets first.

According to the text, it has been argued that the ultimate goal of effective supply chain management systems is to:

reduce inventory.

Companies in the United States, Canada, and the United Kingdom tend to:

rely on equity more than do companies in most other countries.

In their measurement and disclosure for accounting systems, less developed countries tend toward:

secrecy and conservatism.

A geocentric staffing policy:

selects the best person for each job, without considering national origin.

The Anglo-American inclination toward optimism is explained by a desire to:

show impressive earnings that will attract investors.

Microloans are usually:

small loans made to small businesses, usually in developing countries.

Documented agreements containing technical specifications or other precise criteria that will be used consistently as guidelines, rules, or definitions of the characteristics of a product, process, or service are referred to as:

standards.

Relocating some or all of a business's activities or processes to a foreign location is:

subcontracting.

Efforts to improve the efficiency and effectiveness of a firm's international operations are often referred to as:

supply chain management.

Activities that are involved in producing a company's products and services and how these activities are linked together are often referred to as:

supply chains.

Executive compensation packages sometimes include payments called perks that are extras and are:

symbols of rank in the company hierarchy.

. Intermediate technology is:

technology between the capital-and labor-intensive processes.

The functional currency of a foreign operation is:

the currency in which cash flows, pricing, expenses, and financing are denominated.

Manufacturing rationalization is:

the division of production among several subsidiaries so that each produces only a limited number of components for all subsidiaries.

Transaction exposure occurs when:

the firm has transactions in a foreign currency.

Backward vertical integration refers to:

the installation of production facilities to produce inputs for the production of final products.

Regardless of the functional currency, retained earnings are translated at:

the rate in effect when the earnings were posted.

Whether the functional currency is local or the parent company's currency, owner's equity is always translated at:

the rate in effect when the stock was issued.

Financial statements in Germany and the United States are:

the same in all areas except for the income statement.

In the temporal method, fixed assets such as real estate are translated at:

their historic cost.

A polycentric staffing policy is appropriate when:

there are low levels of pressure for cost reduction and high levels for localization.

Investigation of export and import data shows:

there is a strong relationship between global sourcing and ownership of the foreign sources.

When host-county nationals are employed:

they are familiar with local customs, culture, and language.

An advantage of using home-country citizens abroad is:

they expand their experience, enhancing their potential for promotion at home.

International status is the status of:

third-country nationals.

With regard to the use of women versus men for expat management assignments:

those women who go into expatriate positions tend to do well. The hurdle is in getting the assignment.

Foreign exchange risks—transaction, translation, or economic—are caused most directly by:

unanticipated movements in exchange rates.

One way to avoid transaction exposure is to:

use home-country currency for all transactions.

For expatriate employees, the salary portion of the compensation package is:

usually within the range of that for the employees at the same level in the home company.

When a new plant can be built that is a duplicate of others already functioning:

vendors will be requested to furnish equipment that they have supplied previously.

The key issue related to translation exposure is:

what method to use for the translation, current rate or temporal.

The following arrangement can provide a firm with foreign products:

wholly owned subsidiary.