Midas Touch, a Venture Capital Firm, Has the Opportunity to Invest

Multiple Choice

Midas Touch, a venture capital firm, has the opportunity to invest in one of two firms that are in the process of globalizing. Coolco, an air-conditioner manufacturer, faces intense pressure from its home market. Barker, a dog-toy manufacturer, has encountered little competition in its country of origin. In which company should Midas Touch invest?

A) Coolco, because air conditioners cost more to ship than dog toys do
B) Coolco, because firms that face stiff competition at home tend to do better abroad
C) Barker, because firms that face little or no competition at home tend to do better abroad
D) Barker, because dog toys cost less to ship than air conditioners do