D080 EXAM 6 QUESTIONS AND CORRECT
ANSWERS!!
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
A company is considering using a direct distribution strategy.
What is a disadvantage of this distribution strategy?
Required to arrange for transportation
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 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 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 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 company is considering using a direct distribution strategy.
What is a disadvantage of this distribution strategy?
Required to arrange for transportation
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
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 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?
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?
Two countries agree to open their borders to international business transactions with one
another without tariffs.
How does this affect global business?
ANSWERS!!
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
A company is considering using a direct distribution strategy.
What is a disadvantage of this distribution strategy?
Required to arrange for transportation
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 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 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 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 company is considering using a direct distribution strategy.
What is a disadvantage of this distribution strategy?
Required to arrange for transportation
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
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 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?
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?
Two countries agree to open their borders to international business transactions with one
another without tariffs.
How does this affect global business?
