Question 1

When a company seeks equity financing, it may obtain capital from ______.

Accepted Answer

A)  private placements with investors 
B)  initial public offering in home-country stock markets 
C)  initial public offering in foreign stock markets 
D)  All of the above

Question 2

Which of the following statements is incorrect?

Accepted Answer

A)  Sale tax in the U.S. is calculated based on the total purchase price 
B)  Value-added tax is calculated at the last stage of the supply chain 
C)  Countries differ in not only tax rates but also in how they determine taxable income 
D)  Withholding tax is tax levied on passive incomes like dividends and royalties

Question 3

Which of the following payment methods is most commonly used in international trade?

Accepted Answer

A)  Consignment 
B)  Letter of credit 
C)  Open account 
D)  Cash in advance

Question 4

When the functional currency of a subsidiary is different from the parent firm's reporting currency, it should use _____ to translate financial statements.

Accepted Answer

A)  current rate method 
B)  temporal method 
C)  forward rate method 
D)  swap rate method

Question 5

When a subsidiary obtains a loan from its parent company, it conducts __________.

Accepted Answer

A)  debt market financing 
B)  bank financing 
C)  equity market financing 
D)  intercompany financing

Question 6

_______ is a written order by one party to another party to make a certain amount of payment.

Accepted Answer

A)  Bill of lading 
B)  Bill of credit 
C)  Bill of exchange 
D)  Bill of shipment

Question 7

What motivated Canada's adoption of IFRS?

Accepted Answer

The answer of What motivated Canada's adoption of IFRS?...

Question 8

What kind of roles did various financing sources play in Alibaba's growth? What were the benefits and drawbacks of those sources?

Accepted Answer

The answer of What kind of roles did various financing...

Question 9

Do you agree that tax inversion should be restricted? Why?

Accepted Answer

The answer of Do you agree that tax inversion should...

Question 10

How do multinational companies handle different tax rates and double taxation? How do they lower their worldwide tax payment?

Accepted Answer

The answer of How do multinational companies handle different tax...

Question 11

Should governments take actions to deter tax avoidance?

Accepted Answer

The answer of Should governments take actions to deter tax...

Question 12

What factors drove the expansion of the Big Four's China businesses in China?

Accepted Answer

The answer of What factors drove the expansion of the...

Question 13

An advantage of intercompany financing is:

Accepted Answer

A)  It allows an MNC to better utilize its internal resources 
B)  It allows an MNC to move money freely across border 
C)  It helps raise additional capital for the MNC 
D)  It increase the MNC's visibility in financial markets

Question 14

In your opinion, why did the new company set up its headquarters in Canada?

Accepted Answer

The answer of In your opinion, why did the new...

Question 15

Which of the following statements is incorrect?

Accepted Answer

A)  Different accounting standards can lead to performance variations in financial reports 
B)  The consolidated reports of a publicly held company need to comply with the GAAP of all the countries in which it operates 
C)  MNCs' subsidiaries are required to provide financial statements in accordance with the host-country's GAAP 
D)  MNCs' subsidiaries may be required by their headquarters to provide financial information based on the home-country GAAP.

Question 16

Common approaches to financing international trade include the following except ________.

Accepted Answer

A)  credit terms offered by exporters 
B)  financing provided by equity investors 
C)  lines of credit from commercial banks 
D)  financial assistance from government agencies like the ExIm Bank

Question 17

What are the major financial sources MNCs may use?

Accepted Answer

The answer of What are the major financial sources MNCs...

Question 18

Which of the following payment methods is most preferred by exporters?

Accepted Answer

A)  Draft 
B)  Letter of credit 
C)  Open account 
D)  Cash in advance

Question 19

In order to allocate financial resources, MNCs may use _________ to quantify and compare the benefit, the cost, and the risk of an investment.

Accepted Answer

A)  currency hedging 
B)  tax inversion 
C)  credit insurance 
D)  capital budgeting

Question 20

A German MNC conducts most transactions in U.S. dollars. The functional currency of the company is _______, and the reporting currency of the company is _________.

Accepted Answer

A)  U.S. dollar … euro 
B)  Euro … euro 
C)  U.S. dollar … U.S. dollar 
D)  U.S. dollar … euro.

Exam 10: Managing Money

When a company seeks equity financing, it may obtain capital from ______.

Which of the following statements is incorrect?

Which of the following payment methods is most commonly used in international trade?

When the functional currency of a subsidiary is different from the parent firm's reporting currency, it should use _____ to translate financial statements.

When a subsidiary obtains a loan from its parent company, it conducts __________.

_______ is a written order by one party to another party to make a certain amount of payment.

What motivated Canada's adoption of IFRS?

What kind of roles did various financing sources play in Alibaba's growth? What were the benefits and drawbacks of those sources?

Do you agree that tax inversion should be restricted? Why?

How do multinational companies handle different tax rates and double taxation? How do they lower their worldwide tax payment?

Should governments take actions to deter tax avoidance?

What factors drove the expansion of the Big Four's China businesses in China?

An advantage of intercompany financing is:

In your opinion, why did the new company set up its headquarters in Canada?

Which of the following statements is incorrect?

Common approaches to financing international trade include the following except ________.

What are the major financial sources MNCs may use?

Which of the following payment methods is most preferred by exporters?

In order to allocate financial resources, MNCs may use _________ to quantify and compare the benefit, the cost, and the risk of an investment.

A German MNC conducts most transactions in U.S. dollars. The functional currency of the company is _, and the reporting currency of the company is ___.