Question 1

Which of the following statements best differentiates between franchising and licensing?

Accepted Answer

A) Licensing gives a company greater control than franchising over the sale of its product in a target market. 
B) Franchising is common in manufacturing industries while licensing is primarily used in service industries. 
C) Franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property. 
D) Licensees must often meet strict guidelines on product quality,day-to-day management duties,and marketing promotions unlike franchisees. 
A) Licensing gives a company greater control than franchising over the sale of its product in a target market. 
B) Franchising is common in manufacturing industries while licensing is primarily used in service industries. 
C) Franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property. 
D) Licensees must often meet strict guidelines on product quality,day-to-day management duties,and marketing promotions unlike franchisees.

Question 2

Advance payment is the least favorable method of payment collection for exporters.

Accepted Answer

A) True 
 B)False

Question 3

Low tariffs and high quota limits encourage market entry by means of investment.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following allows a country to earn back some of the currency it pays out for imports?

Accepted Answer

A) switch trading 
B) counterpurchase 
C) buyback 
D) barter 
A) switch trading 
B) counterpurchase 
C) buyback 
D) barter

Question 5

Which of the following refers to the exchange of goods or services directly for other goods or services without the use of money?

Accepted Answer

A) offset 
B) barter 
C) counterpurchase 
D) switch trading 
A) offset 
B) barter 
C) counterpurchase 
D) switch trading

Question 6

Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc. ,a business that develops,manufactures,and markets sports products.The company is looking to expand its operations into the European market.Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe,the company will achieve success there.
-The board of directors of Sports Stuff is concerned with the firm's lack of experience in foreign markets.To minimize this problem,Herb recommends that the firm create a ________ with a local partner.

Accepted Answer

A) joint venture 
B) turnkey project 
C) wholly owned subsidiary 
D) franchise 
A) joint venture 
B) turnkey project 
C) wholly owned subsidiary 
D) franchise

Question 7

Countertrade is not an option for smaller companies because of the cash outlays involved.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following refers to a contract between the exporter and shipper that specifies merchandise destination and shipping costs?

Accepted Answer

A) sight draft 
B) bill of lading 
C) letter of credit 
D) bill of exchange 
A) sight draft 
B) bill of lading 
C) letter of credit 
D) bill of exchange

Question 9

Gro-Tru Grows To Europe
Gro-Tru,a maker of chemical fertilizers and pesticides,sees enormous growth potential in Central Europe.The company has received several inquiries from potential importers in the region,but in most cases,the potential importers have expressed difficulty in obtaining the hard currency to pay for Gro-Tru's products.Alistair Green,vice-president for business development,is exploring how Gro-Tru can meet the needs of the potential market.
-One option that intrigues Alistair is the process in which one company sells to another its obligation to make a purchase in a given country.This arrangement is known as ________.

Accepted Answer

A) barter 
B) offset 
C) switch trading 
D) buyback 
A) barter 
B) offset 
C) switch trading 
D) buyback

Question 10

A sight draft extends the period of time following delivery by which the importer must pay for goods.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an advantage of wholly owned subsidiaries?

Accepted Answer

A) The parent company receives all profits generated by the subsidiary. 
B) They are the least expensive investment entry modes. 
C) They help in the sharing of the cost of an international investment project. 
D) They are the least risky when compared to other investment entry modes. 
A) The parent company receives all profits generated by the subsidiary. 
B) They are the least expensive investment entry modes. 
C) They help in the sharing of the cost of an international investment project. 
D) They are the least risky when compared to other investment entry modes.

Question 12

Which of the following is a method of export/import financing in which the importer's bank issues a document stating that the bank will pay the exporter when the exporter fulfills the terms of the document?

Accepted Answer

A) sight draft 
B) bill of lading 
C) letter of credit 
D) bill of exchange 
A) sight draft 
B) bill of lading 
C) letter of credit 
D) bill of exchange

Question 13

Describe the process of how the documentary collection procedure works using an example.

Accepted Answer

Export/import financing in which a bank

Question 14

Which of the following is the oldest known form of countertrade?

Accepted Answer

A) counterpurchase 
B) switch trading 
C) offset 
D) barter 
A) counterpurchase 
B) switch trading 
C) offset 
D) barter

Question 15

Why would an exporter use a sales representative or a distributor? Why would the exporter be reluctant to offer an open account payment method?

Accepted Answer

Some companies become deeply involved in

Question 16

The open account method of export/import financing is used when the two parties are unfamiliar with each other.

Accepted Answer

A) True 
 B)False

Question 17

Letters of credit are popular among traders because banks assume most of the risks.

Accepted Answer

A) True 
 B)False

Question 18

A(n)________ allows the bank to modify the terms of the letter only after obtaining the approval of both exporter and importer.

Accepted Answer

A) bill of exchange 
B) bill of lading 
C) confirmed letter of credit 
D) irrevocable letter of credit 
A) bill of exchange 
B) bill of lading 
C) confirmed letter of credit 
D) irrevocable letter of credit

Question 19

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Accepted Answer

A) indirect exporting 
B) counterpurchase 
C) an acquisition 
D) a joint venture 
A) indirect exporting 
B) counterpurchase 
C) an acquisition 
D) a joint venture

Question 20

Which of the following is a contractual entry mode in which one company supplies another with intangible property and other assistance over an extended period?

Accepted Answer

A) franchising 
B) management contract 
C) licensing 
D) strategic alliance 
A) franchising 
B) management contract 
C) licensing 
D) strategic alliance

Which of the following statements best differentiates between franchising and licensing?

Advance payment is the least favorable method of payment collection for exporters.

Low tariffs and high quota limits encourage market entry by means of investment.

Which of the following allows a country to earn back some of the currency it pays out for imports?

Which of the following refers to the exchange of goods or services directly for other goods or services without the use of money?

Countertrade is not an option for smaller companies because of the cash outlays involved.

Which of the following refers to a contract between the exporter and shipper that specifies merchandise destination and shipping costs?

A sight draft extends the period of time following delivery by which the importer must pay for goods.

Which of the following is an advantage of wholly owned subsidiaries?

Which of the following is a method of export/import financing in which the importer's bank issues a document stating that the bank will pay the exporter when the exporter fulfills the terms of the document?

Describe the process of how the documentary collection procedure works using an example.

Which of the following is the oldest known form of countertrade?

Why would an exporter use a sales representative or a distributor? Why would the exporter be reluctant to offer an open account payment method?

The open account method of export/import financing is used when the two parties are unfamiliar with each other.

Letters of credit are popular among traders because banks assume most of the risks.

A(n)________ allows the bank to modify the terms of the letter only after obtaining the approval of both exporter and importer.

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Which of the following is a contractual entry mode in which one company supplies another with intangible property and other assistance over an extended period?

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Political Economy of Trade

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters

Exam 13: Selecting and Managing Entry Modes

Which of the following statements best differentiates between franchising and licensing?

Advance payment is the least favorable method of payment collection for exporters.

Low tariffs and high quota limits encourage market entry by means of investment.

Which of the following allows a country to earn back some of the currency it pays out for imports?

Which of the following refers to the exchange of goods or services directly for other goods or services without the use of money?

Countertrade is not an option for smaller companies because of the cash outlays involved.

Which of the following refers to a contract between the exporter and shipper that specifies merchandise destination and shipping costs?

A sight draft extends the period of time following delivery by which the importer must pay for goods.

Which of the following is an advantage of wholly owned subsidiaries?

Which of the following is a method of export/import financing in which the importer's bank issues a document stating that the bank will pay the exporter when the exporter fulfills the terms of the document?

Describe the process of how the documentary collection procedure works using an example.

Which of the following is the oldest known form of countertrade?

Why would an exporter use a sales representative or a distributor? Why would the exporter be reluctant to offer an open account payment method?

The open account method of export/import financing is used when the two parties are unfamiliar with each other.

Letters of credit are popular among traders because banks assume most of the risks.

A(n)________ allows the bank to modify the terms of the letter only after obtaining the approval of both exporter and importer.

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Which of the following is a contractual entry mode in which one company supplies another with intangible property and other assistance over an extended period?

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Political Economy of Trade

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters