Answered: What are the advantages and…

What are the advantages and disadvantages of forming a joint venture to serve a foreign market compared to serving that market with a wholly owned production subsidiary

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter13: Direct Foreign Investment

Section: Chapter Questions

Problem 4ST

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15. What are the advantages and disadvantages of forming a joint venture to serve a foreign market compared to serving that market with a wholly owned production subsidiary?

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Match each term in Column A with its related definition in Column B. Column A 1. ____________ Maquiladora 2. ____________ Import 3. ____________ Joint venture 4. ____________ Export 5. ____________ MNC Column B a. A company that does business in more than one country in such volume that its well-being and growth rest in more than one country. b. A company purchases materials or parts from another company that is located in a foreign country. c. A company sells its product to purchasers located in foreign countries. d. A type of partnership in which investors from one country co-own the enterprise with investors from another country. e. A manufacturing plant located in Mexico that processes imported materials and reexports them to the United States.
Can a foreign company and a domestic company enter into a Joint Venture? what are the requirements? Philippine laws is applicable for this question
If a firm does not have foreign subsidiaries, it is not subject to ____. Group of answer choices transaction exposure economic exposure translation exposure A and B
51. A US based company that buys components from one of its foreign subsidiaries at a price above market is likely to Group of answer choices shifting from a high tax country to a low tax country need tax consultants to be intermediaries get large dividends by the subsidiary ask for the money back
Question 2 The Liability of Foreigness (LOF) is the inherent disadvantage of foreign firms experience in host countries because of their non-native status. Assume that you are the owner of a small and reasonable profitable firm,would you consider expanding oversea? Elaborate your point of view by relate with the issues of foreign market entry
The form of entry strategy into international operations that offers the lowest level of control would be :- franchising. licensing. joint venture. exporting.
56. Jensen Co. wants to establish a new subsidiary in Mexico that will sell computers to Mexican customers and remit earnings back to the U.S. parent. The value of this project will be favorably affected if the value of the peso ____ while it establishes the new subsidiary and ____ when the subsidiary starts operations. A. depreciates; appreciates B. appreciates; appreciates C. appreciates; depreciates D. depreciates; depreciates
An American company is considering entering into a joint venture with a Japanese firm. Describe what cultural differ-ences each party should consider.
Assume that an U.S. firm wants to engage in international business without making a major investment in the foreign country. Which method is LEAST appropriate in this situation? A. licensing B. acquisition of an existing firm in the foreign country C. exporting D. franchising
If both big companies enter into a joint venture, will that signify unfair competition? Explain briefly.
Which of the following statements are true about globaliza-tion methods? a. International licensing involves the creation of a new company that is owned by two or more firms from dif-ferent countries. b. Exporting involves contracts that allow a foreign com-pany to use a domestic company’s trademarks, patents, processes, or technology.c. Global sourcing involves the close coordination ofresearch and development, purchasing, marketing, andmanufacturing across national boundaries.d. A wholly owned international subsidiary is createdwhen a foreign government owns 100 percent of theequity in a U.S.-based firm.
Joint ventures involve the merging of two or more companies. ( ) a) True () b) False A country experiences a trade surplus when the total value of exports is higher than the total value of imports. () a) True () b) False