Question 1

Which of the following statements holds true for cost of capital?

Accepted Answer

A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to a process that lets the customer buying the goods or services defer payment on the good or services for a specified period of time, typically thirty or ninety days. 
D) It refers to a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to the rate of return that a company could earn if it chose a different investment of equivalent risk. 
A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to a process that lets the customer buying the goods or services defer payment on the good or services for a specified period of time, typically thirty or ninety days. 
D) It refers to a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to the rate of return that a company could earn if it chose a different investment of equivalent risk.

Question 2

Adopting different accounting standards makes it easier for investors or lenders to compare the financial health of two companies.

Accepted Answer

A) True 
 B)False

Question 3

_____ refers to the ways in which a multinational firm's assets are financed, from short-term borrowing to long-term debt and equity.

Accepted Answer

The answer of _____ refers to the ways in which...

Question 4

_____ refers to using financial instruments to reduce adverse price movements by taking an offsetting position.

Accepted Answer

The answer of _____ refers to using financial instruments to...

Question 5

The advantage of the _____ agreement between the parent and foreign subsidiaries is that if the exchange rate changes, the subsidiary will be not be blamed or credited for the change.

Accepted Answer

A) forward exchange rate 
B) effective interest rate 
C) spot exchange rate 
D) internal forward rate 
E) temporal rate 
A) forward exchange rate 
B) effective interest rate 
C) spot exchange rate 
D) internal forward rate 
E) temporal rate

Question 6

Which of the following statements about the GAAP rules and IFRS is true?

Accepted Answer

A) The last-in, first-out (LIFO) accounting method is allowed by IFRS but banned by GAAP. 
B) All companies listed on EU stock exchanges are required to use GAAP, while those listed on the New York stock exchange are required to use IFRS. 
C) A US company seeking to raise funds in Germany has to prepare a financial reporting according to GAAP rules only. 
D) Adhering to US GAAP rules as well as IFRS creates extra labor and paperwork for multinational firms. 
E) China is the only country where accounting rules follow both GAAP and IFRS. 
A) The last-in, first-out (LIFO) accounting method is allowed by IFRS but banned by GAAP. 
B) All companies listed on EU stock exchanges are required to use GAAP, while those listed on the New York stock exchange are required to use IFRS. 
C) A US company seeking to raise funds in Germany has to prepare a financial reporting according to GAAP rules only. 
D) Adhering to US GAAP rules as well as IFRS creates extra labor and paperwork for multinational firms. 
E) China is the only country where accounting rules follow both GAAP and IFRS.

Question 7

Which of the following statements holds true for fronting loan?

Accepted Answer

A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to a process which in which the parent company directly gives a loan to its subsidiary. 
D) It refers to the funding of the subsidiary by the parent company through a financial intermediary such as a bank. 
E) It refers to the loan on which the bank charges companies a slightly lower rate of interest for expanding operations in developing countries. 
A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to a process which in which the parent company directly gives a loan to its subsidiary. 
D) It refers to the funding of the subsidiary by the parent company through a financial intermediary such as a bank. 
E) It refers to the loan on which the bank charges companies a slightly lower rate of interest for expanding operations in developing countries.

Question 8

Which of the following statements holds true for indirect tax?

Accepted Answer

A) It refers to the tax levied on the value of a property that the owner of the property is required to pay to the government of the country in which the property is located. 
B) It refers to the tax that is shifted to another person or entity, like the value-added tax (VAT), which is levied on the seller but is passed on and paid by buyer. 
C) It refers to the tax that is levied on the HYPERLINK "http://en.wikipedia.org/wiki/Income" \o "Income" income of individuals or businesses (corporations or other legal entities). 
D) It refers to the tax that is levied on the passing of HYPERLINK "http://en.wikipedia.org/wiki/Title_%28property%29" \o "Title (property)" title to HYPERLINK "http://en.wikipedia.org/wiki/Property" \o "Property" property from one person (or entity) to another. 
E) It refers to the HYPERLINK "http://en.wikipedia.org/wiki/Tax" \o "Tax" tax that is levied on and paid by the seller. 
A) It refers to the tax levied on the value of a property that the owner of the property is required to pay to the government of the country in which the property is located. 
B) It refers to the tax that is shifted to another person or entity, like the value-added tax (VAT), which is levied on the seller but is passed on and paid by buyer. 
C) It refers to the tax that is levied on the HYPERLINK "http://en.wikipedia.org/wiki/Income" \o "Income" income of individuals or businesses (corporations or other legal entities). 
D) It refers to the tax that is levied on the passing of HYPERLINK "http://en.wikipedia.org/wiki/Title_%28property%29" \o "Title (property)" title to HYPERLINK "http://en.wikipedia.org/wiki/Property" \o "Property" property from one person (or entity) to another. 
E) It refers to the HYPERLINK "http://en.wikipedia.org/wiki/Tax" \o "Tax" tax that is levied on and paid by the seller.

Question 9

Which of the following statements holds true for trade credit?

Accepted Answer

A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to a process that lets the customer buying the goods or services defer payment on the good or services for a specified period of time, typically thirty or ninety days. 
D) It refers to the process and a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to the rate of return that a company could earn if it chose a different investment of equivalent risk. 
A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to a process that lets the customer buying the goods or services defer payment on the good or services for a specified period of time, typically thirty or ninety days. 
D) It refers to the process and a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to the rate of return that a company could earn if it chose a different investment of equivalent risk.

Question 10

_____ refers to Islamic law which, in terms of finance, prohibits charging interest on money and other common business activities, including short selling.

Accepted Answer

The answer of _____ refers to Islamic law which, in...

Question 11

Which of the following statements holds true for capital budgeting?

Accepted Answer

A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to raising capital by selling shares of stock. 
D) It refers to a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to a technique that companies use to reduce the costs of cross-border payments between subsidiaries. 
A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to raising capital by selling shares of stock. 
D) It refers to a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to a technique that companies use to reduce the costs of cross-border payments between subsidiaries.

Question 12

_____ refers to a country that has very advantageous (i.e., low) corporate income taxes.

Accepted Answer

The answer of _____ refers to a country that has...

Question 13

Premium pricing, bank fees, and interest payments are costs associated with the current-rate method of foreign-currency translation.

Accepted Answer

A) True 
 B)False

Question 14

What is the role of government in terms of international business and finance?

Accepted Answer

The role of government in terms of inter

Question 15

An organization wants to raise cash in order to fund its expansion plans.The company that currently has 500,000 ordinary shares decides to issue 125,000 new shares to raise cash.The above is an example of:

Accepted Answer

A) debt financing. 
B) capital budgeting. 
C) equity financing. 
D) multilateral netting. 
E) fronting loan. 
A) debt financing. 
B) capital budgeting. 
C) equity financing. 
D) multilateral netting. 
E) fronting loan.

Question 16

Subsidiaries purchase assets at different times throughout the year and therefore the balance sheet of a multinational firm may not balance if the current-rate method is used.

Accepted Answer

A) True 
 B)False

Question 17

What are the reasons for adopting one global accounting standard across the financial world?

Accepted Answer

The primary reason for adopting one stan

Question 18

_____ financial statements demonstrate that firms, although legally separate from the parent and each other, are in fact economically interdependent.

Accepted Answer

The answer of _____ financial statements demonstrate that firms, although...

Question 19

What alternatives to interest and speculative investments are approved by Sharia?

Accepted Answer

One alternative investment strategy, mus

Question 20

An American aircraft manufacturer has a subsidiary in Indonesia.The subsidiary needs funding to expand its operations.The parent company deposits the required funds in a London based international bank.The money is then transferred to the subsidiary by the bank.The above serves as an example of:

Accepted Answer

A) debt financing. 
B) transfer pricing. 
C) equity financing. 
D) trade credit. 
E) fronting loan. 
A) debt financing. 
B) transfer pricing. 
C) equity financing. 
D) trade credit. 
E) fronting loan.

Which of the following statements holds true for cost of capital?

Adopting different accounting standards makes it easier for investors or lenders to compare the financial health of two companies.

_____ refers to the ways in which a multinational firm's assets are financed, from short-term borrowing to long-term debt and equity.

_____ refers to using financial instruments to reduce adverse price movements by taking an offsetting position.

The advantage of the _____ agreement between the parent and foreign subsidiaries is that if the exchange rate changes, the subsidiary will be not be blamed or credited for the change.

Which of the following statements about the GAAP rules and IFRS is true?

Which of the following statements holds true for fronting loan?

Which of the following statements holds true for indirect tax?

Which of the following statements holds true for trade credit?

_____ refers to Islamic law which, in terms of finance, prohibits charging interest on money and other common business activities, including short selling.

Which of the following statements holds true for capital budgeting?

_____ refers to a country that has very advantageous (i.e., low) corporate income taxes.

Premium pricing, bank fees, and interest payments are costs associated with the current-rate method of foreign-currency translation.

What is the role of government in terms of international business and finance?

An organization wants to raise cash in order to fund its expansion plans.The company that currently has 500,000 ordinary shares decides to issue 125,000 new shares to raise cash.The above is an example of:

Subsidiaries purchase assets at different times throughout the year and therefore the balance sheet of a multinational firm may not balance if the current-rate method is used.

What are the reasons for adopting one global accounting standard across the financial world?

_____ financial statements demonstrate that firms, although legally separate from the parent and each other, are in fact economically interdependent.

What alternatives to interest and speculative investments are approved by Sharia?

An American aircraft manufacturer has a subsidiary in Indonesia.The subsidiary needs funding to expand its operations.The parent company deposits the required funds in a London based international bank.The money is then transferred to the subsidiary by the bank.The above serves as an example of:

Introduction

International Trade and Foreign Direct Investment

Culture and Business

World Economies

Global and Regional Economic Cooperation and Integration

International Monetary System

Foreign Exchange and the Global Capital Markets

International Expansion and Global Market Opportunity Assessment

Exporting, Importing, and Global Sourcing

Strategy and International Business

Global Entrepreneurship and Intrapreneurship

Winning Through Effective, Global Talent Management

Harnessing the Engine of Global Innovation

Competing Effectively Through Global Marketing, Distribution, and Supply-Chain Management

Filters

Exam 15: Understanding the Roles of Finance and Accounting in Global Competitive Advantage

Which of the following statements holds true for cost of capital?

Adopting different accounting standards makes it easier for investors or lenders to compare the financial health of two companies.

_____ refers to the ways in which a multinational firm's assets are financed, from short-term borrowing to long-term debt and equity.

_____ refers to using financial instruments to reduce adverse price movements by taking an offsetting position.

The advantage of the _____ agreement between the parent and foreign subsidiaries is that if the exchange rate changes, the subsidiary will be not be blamed or credited for the change.

Which of the following statements about the GAAP rules and IFRS is true?

Which of the following statements holds true for fronting loan?

Which of the following statements holds true for indirect tax?

Which of the following statements holds true for trade credit?

_____ refers to Islamic law which, in terms of finance, prohibits charging interest on money and other common business activities, including short selling.

Which of the following statements holds true for capital budgeting?

_____ refers to a country that has very advantageous (i.e., low) corporate income taxes.

Premium pricing, bank fees, and interest payments are costs associated with the current-rate method of foreign-currency translation.

What is the role of government in terms of international business and finance?

An organization wants to raise cash in order to fund its expansion plans.The company that currently has 500,000 ordinary shares decides to issue 125,000 new shares to raise cash.The above is an example of:

Subsidiaries purchase assets at different times throughout the year and therefore the balance sheet of a multinational firm may not balance if the current-rate method is used.

What are the reasons for adopting one global accounting standard across the financial world?

_____ financial statements demonstrate that firms, although legally separate from the parent and each other, are in fact economically interdependent.

What alternatives to interest and speculative investments are approved by Sharia?

An American aircraft manufacturer has a subsidiary in Indonesia.The subsidiary needs funding to expand its operations.The parent company deposits the required funds in a London based international bank.The money is then transferred to the subsidiary by the bank.The above serves as an example of:

Introduction

International Trade and Foreign Direct Investment

Culture and Business

World Economies

Global and Regional Economic Cooperation and Integration

International Monetary System

Foreign Exchange and the Global Capital Markets

International Expansion and Global Market Opportunity Assessment

Exporting, Importing, and Global Sourcing

Strategy and International Business

Global Entrepreneurship and Intrapreneurship

Winning Through Effective, Global Talent Management

Harnessing the Engine of Global Innovation

Competing Effectively Through Global Marketing, Distribution, and Supply-Chain Management

Filters