Reference no: EM13727194

1. Should tax-related factors be considered in evaluating a foreign target?

Yes, different tax rates may increase after-tax earnings

No, corporate tax rates in the home country and the foreign country are the same

No, foreign taxes can be deducted from home country taxes

Yes, corporate tax rates in the home country are always higher

None of the above

2. Counter purchase:

Is a form of barter

Involves two separate transactions

Always involves governments and MNCs

Is not a form of counter trade

None of the above

3. MNCs sometimes measure country risk by assigning weights to factors. Which of the following is correct?

Weights should be equally allocated among factors

Factors will be identical for all MNCs conducting business in the same country

Factors for political and financial risk will be equally weighed in the final analysis

Weights should be assigned to factors for political and financial risk according to their perceived importance.

None of the above

4. The Export-Import Bank of the U.S. offers various programs, including:

Medium-term guarantee program

Bank insurance programs for exporters

Export credit insurance program for exporters

Working capital guarantee program

All of the above

5. U.S. MNC is considering investing in Portuguese securities. The exchange rate is € = $1.33. If the euro depreciates, the effective yield on the investment will be:

Higher, because the euro will convert to fewer dollars

Lower, because the euro will convert to fewer dollars

Higher, because the dollar will convert to fewer euros

Lower, because the dollar will convert to more euros

Lower, because the dollar will convert to more euros

6. Spain and South Africa have very different economic conditions. A MNC would reduce risk by:

Operating in both countries

Operating in Spain, but not South Africa

Operating in South Africa, but not Spain

Operating in neither country

None of the above

With consignments:

7. The exporter ships the goods to the importer along with the title to the goods

The importer pays the exporter as soon as the goods are received

The importer pays the exporter when the goods are sold

The exporter and importer assume equal risk

 

None of the above.