A Canadian software company decides to buy majority stakes in a Chinese firm producing software. The company even adds to its Chinese production capacity. Which of the following could be a potential disadvantage of this direct investment?
A) The Canadian firm will find it difficult to achieve economies of scale.
B) This is the least financially rewarding mode of international expansion.
C) The Canadian firm will have very limited control on its Chinese investment.
D) The Canadian firm will be subject to the piracy problems in China.
E) The Canadian firm will be subject to a higher cost of production in China.
D
You might also like to view...
Marcus has continued to tell sexually explicit jokes during lunch breaks even after being warned that such behavior was inappropriate and that he had to stop. Marcus is engaging in ______ sexual harassment.
a. intimidating b. offensive c. antisocial d. hostile
Which of the following is most likely to be a temporary source of financing?
A) commercial paper B) common stock C) preferred stock D) long-term debt
Ford Motor Company is considering launching a new line of hybrid diesel-electric SUVs. The heavy advertising expenses associated with the new SUV launch would generate operating losses of $35 million next year. Without the new SUV,
Ford expects to earn pre-tax income of $80 million from operations next year. Ford pays a 35% tax rate on its pre-tax income. The amount that Ford Motor Company owes in taxes next year without the launch of the new SUV is closest to ________. A) $28.0 million B) 12.3 million C) $40.3 million D) $15.8 million
Which of the following statements is CORRECT?
A. If CF0 is positive and all the other CFs are negative, then you can still solve for I. B. If you have a series of cash flows, each of which is positive, you can solve for I, where the solution value of I causes the PV of the cash flows to equal the cash flow at Time 0. C. If you have a series of cash flows, and CF0 is negative but each of the following CFs is positive, you can solve for I, but only if the sum of the undiscounted cash flows exceeds the cost. D. To solve for I, one must identify the value of I that causes the PV of the positive CFs to equal the absolute value of the FV of the negative CFs. It is impossible to find the value of I without a computer or financial calculator. E. If you solve for I and get a negative number, then you must have made a mistake.