IBUS 401 EXAM 1
CORRECT 100%
Common finance decisions include: - ANSWER Whether to discontinue, pursue,
expand, business in certain country or how to finance expansion
Finance decisions are influenced by: - ANSWER Marketing, management, accounting
and information systems
Agency problem - ANSWER The conflict of goals between managers and shareholders
Product cycle theory - ANSWER As a firm matures, it recognizes opportunities outside
its domestic market
How firms engage in international business - ANSWER International trade, licensing,
franchising, joint ventures, acquisitions of existing operations, establishment of new
foreign subsidiaries
International trade - ANSWER Penetrate markets by exporting, obtain supplies at a low
cost by importing
Licensing - ANSWER Obligated firm to provide technology (copyrights, patents,
trademarks) in exchange for fees or some other benefit... firm is able to generate more
revenue from foreign countries without establishing any production plants in foreign
countries or transporting goods to foreign countries
Franchising - ANSWER Obligates firm to provide a specialized sales or service
strategy, support assistance, and possibly an initial investment in the franchise in
exchange for periodic fees, often requires direct foreign investment
Joint ventures - ANSWER Venture jointly owned and operated by two or more firms
Acquisition of exsisting operations - ANSWER Acquisition of firm in foreign countries
allows firms to have full control over their foreign businesses and quickly obtain a a
large portion of foreign market share, subject to risk of larger loss
Establishment of new foreign subsidiaries - ANSWER Firm penetrates market by
establishing new operations in foreign countries, large investment required
Balance of payments - ANSWER Summary of transactions between domestic and
foreign residents for a specific country over a specified period of time
CORRECT 100%
Common finance decisions include: - ANSWER Whether to discontinue, pursue,
expand, business in certain country or how to finance expansion
Finance decisions are influenced by: - ANSWER Marketing, management, accounting
and information systems
Agency problem - ANSWER The conflict of goals between managers and shareholders
Product cycle theory - ANSWER As a firm matures, it recognizes opportunities outside
its domestic market
How firms engage in international business - ANSWER International trade, licensing,
franchising, joint ventures, acquisitions of existing operations, establishment of new
foreign subsidiaries
International trade - ANSWER Penetrate markets by exporting, obtain supplies at a low
cost by importing
Licensing - ANSWER Obligated firm to provide technology (copyrights, patents,
trademarks) in exchange for fees or some other benefit... firm is able to generate more
revenue from foreign countries without establishing any production plants in foreign
countries or transporting goods to foreign countries
Franchising - ANSWER Obligates firm to provide a specialized sales or service
strategy, support assistance, and possibly an initial investment in the franchise in
exchange for periodic fees, often requires direct foreign investment
Joint ventures - ANSWER Venture jointly owned and operated by two or more firms
Acquisition of exsisting operations - ANSWER Acquisition of firm in foreign countries
allows firms to have full control over their foreign businesses and quickly obtain a a
large portion of foreign market share, subject to risk of larger loss
Establishment of new foreign subsidiaries - ANSWER Firm penetrates market by
establishing new operations in foreign countries, large investment required
Balance of payments - ANSWER Summary of transactions between domestic and
foreign residents for a specific country over a specified period of time
