Question 1

Which of the following is a direct tax?

Accepted Answer

A) customs tax 
B) corporate income tax 
C) VAT 
D) sales tax 
A) customs tax 
B) corporate income tax 
C) VAT 
D) sales tax B

Question 2

________ is the process of combining and integrating the financial results of foreign subsidiaries into the financial statements of the parent firm.

Accepted Answer

A) Hedging 
B) Dumping 
C) Consolidation 
D) Trade credit 
A) Hedging 
B) Dumping 
C) Consolidation 
D) Trade credit C

Question 3

Net present value is defined as the ________.

Accepted Answer

A) combined value of the capital assets of a project and the sales projections 
B) difference between the present value of a firm's assets and the future project liabilities 
C) difference between the present value of a project's incremental cash flow and the initial investment 
D) combined value of a project's initial investment and its incremental cash flow 
A) combined value of the capital assets of a project and the sales projections 
B) difference between the present value of a firm's assets and the future project liabilities 
C) difference between the present value of a project's incremental cash flow and the initial investment 
D) combined value of a project's initial investment and its incremental cash flow C

Question 4

Estimating project cash flows is complex and requires forecasting a range of variables that contribute to anticipated revenues and costs over several years.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a factor that complicates capital budgeting in the MNE?

Accepted Answer

A) project cash flows in the reporting currency of the parent firm 
B) government intervention in the project 
C) similar tax rules in the project location and the parent's country 
D) government permit to exclusively transfer funds from the project to the parent firm 
A) project cash flows in the reporting currency of the parent firm 
B) government intervention in the project 
C) similar tax rules in the project location and the parent's country 
D) government permit to exclusively transfer funds from the project to the parent firm

Question 6

Capital budgeting in MNEs is protected from country risks or government intervention.

Accepted Answer

A) True 
 B)False

Question 7

Equity financing comes from ________.

Accepted Answer

A) foreign bonds 
B) domestic bonds 
C) capital by selling stocks 
D) Eurocurrency market 
A) foreign bonds 
B) domestic bonds 
C) capital by selling stocks 
D) Eurocurrency market

Question 8

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

Accepted Answer

The riskiness of debt is perceived diffe

Question 9

A fronting loan would most likely be utilized by an MNE attempting to ________.

Accepted Answer

A) increase transfer pricing 
B) reduce dividend payments 
C) minimize taxes 
D) conceal corporate debt 
A) increase transfer pricing 
B) reduce dividend payments 
C) minimize taxes 
D) conceal corporate debt

Question 10

Capital budgeting is intended to ________.

Accepted Answer

A) assist in the means by which subsidiaries and affiliates charge each other as they exchange goods and services 
B) help managers decide which international projects provide the best financial return 
C) defer payment for goods and services received from the parent firm 
D) eliminate the need for international accounting experts 
A) assist in the means by which subsidiaries and affiliates charge each other as they exchange goods and services 
B) help managers decide which international projects provide the best financial return 
C) defer payment for goods and services received from the parent firm 
D) eliminate the need for international accounting experts

Question 11

Which of the following is a benefit for firms that participate in the global capital market?

Accepted Answer

A) availability of short-term financing 
B) availability of a large pool of financing sources at a lower, competitive rate 
C) access to larger funds exclusively in the domestic market 
D) access to unregulated and secured returns on investment 
A) availability of short-term financing 
B) availability of a large pool of financing sources at a lower, competitive rate 
C) access to larger funds exclusively in the domestic market 
D) access to unregulated and secured returns on investment

Question 12

Describe four factors responsible for the fast-paced growth of the global capital market.

Accepted Answer

First, the deregulation of financial mar

Question 13

Why have global capital markets grown so rapidly in the past decade? Why has the growth of international business pressured multinational firms and international organizations to harmonize world accounting systems?

Accepted Answer

Why did global capital markets grow so r

Question 14

Major supply shocks do not affect exchange rates.

Accepted Answer

A) True 
 B)False

Question 15

Transaction exposure refers to the impact of exchange rate fluctuations on long-term profitability resulting from miscalculated expenses and revenues.

Accepted Answer

A) True 
 B)False

Question 16

Firms obtain debt financing by selling stock shares to investors who then have an ownership interest in the firm.

Accepted Answer

A) True 
 B)False

Question 17

The last task in international financial management is to manage the diversity of international accounting and tax practices.

Accepted Answer

A) True 
 B)False

Question 18

In terms of financial management tasks that are key to MNE success, which of the following comes immediately after the task of raising funds for the firms?

Accepted Answer

A) assesses the financial attractiveness of major investment projects, such as foreign expansion 
B) determines the ideal long-term mix of financing for the firm's international operations 
C) learns to operate in a global environment with diverse accounting practices and international tax regimes 
D) administer funds passing in and out of the firm's value-adding activities 
A) assesses the financial attractiveness of major investment projects, such as foreign expansion 
B) determines the ideal long-term mix of financing for the firm's international operations 
C) learns to operate in a global environment with diverse accounting practices and international tax regimes 
D) administer funds passing in and out of the firm's value-adding activities

Question 19

Gains and losses do not directly affect cash flows in the case of translation exposure, but cash flows can be significantly affected by transaction exposure.

Accepted Answer

A) True 
 B)False

Question 20

Debt financing comes from ________.

Accepted Answer

A) personal savings of founders 
B) loans from financial intermediaries 
C) capital contributed by founders 
D) selling shares of stock to investors 
A) personal savings of founders 
B) loans from financial intermediaries 
C) capital contributed by founders 
D) selling shares of stock to investors

Which of the following is a direct tax?

________ is the process of combining and integrating the financial results of foreign subsidiaries into the financial statements of the parent firm.

Net present value is defined as the ________.

Estimating project cash flows is complex and requires forecasting a range of variables that contribute to anticipated revenues and costs over several years.

Which of the following is a factor that complicates capital budgeting in the MNE?

Capital budgeting in MNEs is protected from country risks or government intervention.

Equity financing comes from ________.

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

A fronting loan would most likely be utilized by an MNE attempting to ________.

Capital budgeting is intended to ________.

Which of the following is a benefit for firms that participate in the global capital market?

Describe four factors responsible for the fast-paced growth of the global capital market.

Why have global capital markets grown so rapidly in the past decade? Why has the growth of international business pressured multinational firms and international organizations to harmonize world accounting systems?

Major supply shocks do not affect exchange rates.

Transaction exposure refers to the impact of exchange rate fluctuations on long-term profitability resulting from miscalculated expenses and revenues.

Firms obtain debt financing by selling stock shares to investors who then have an ownership interest in the firm.

The last task in international financial management is to manage the diversity of international accounting and tax practices.

In terms of financial management tasks that are key to MNE success, which of the following comes immediately after the task of raising funds for the firms?

Gains and losses do not directly affect cash flows in the case of translation exposure, but cash flows can be significantly affected by transaction exposure.

Debt financing comes from ________.

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters

Exam 10: Financial Management and Accounting in the Global Firm

Which of the following is a direct tax?

________ is the process of combining and integrating the financial results of foreign subsidiaries into the financial statements of the parent firm.

Net present value is defined as the ________.

Estimating project cash flows is complex and requires forecasting a range of variables that contribute to anticipated revenues and costs over several years.

Which of the following is a factor that complicates capital budgeting in the MNE?

Capital budgeting in MNEs is protected from country risks or government intervention.

Equity financing comes from ________.

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

A fronting loan would most likely be utilized by an MNE attempting to ________.

Capital budgeting is intended to ________.

Which of the following is a benefit for firms that participate in the global capital market?

Describe four factors responsible for the fast-paced growth of the global capital market.

Why have global capital markets grown so rapidly in the past decade? Why has the growth of international business pressured multinational firms and international organizations to harmonize world accounting systems?

Major supply shocks do not affect exchange rates.

Transaction exposure refers to the impact of exchange rate fluctuations on long-term profitability resulting from miscalculated expenses and revenues.

Firms obtain debt financing by selling stock shares to investors who then have an ownership interest in the firm.

The last task in international financial management is to manage the diversity of international accounting and tax practices.

In terms of financial management tasks that are key to MNE success, which of the following comes immediately after the task of raising funds for the firms?

Gains and losses do not directly affect cash flows in the case of translation exposure, but cash flows can be significantly affected by transaction exposure.

Debt financing comes from ________.

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters