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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Match each term in Column A with its related definition in Column B.

Column A

  1. 1. ____________ Maquiladora
  2. 2. ____________ Import
  3. 3. ____________ Joint venture
  4. 4. ____________ Export
  5. 5. ____________ MNC

Column B

  1. 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.
  2. b. A company purchases materials or parts from another company that is located in a foreign country.
  3. c. A company sells its product to purchasers located in foreign countries.
  4. d. A type of partnership in which investors from one country co-own the enterprise with investors from another country.
  5. e. A manufacturing plant located in Mexico that processes imported materials and reexports them to the United States.

To determine

Identify correct description of the business activities or forms given in the question.

Explanation

International Business:

International business refers to conduct of business in more than one country. It can be done in various ways like importing, exporting, forming joint ventures and multinational companies (MNC). Businesses are conducted in more than one country to avail benefits of other countries for example tax benefits, larger markets, use of low cost labor and raw material.

Correct description of the business activities are shown as follows:

Activities or FormsDescription
MaquiladoraA manufacturing plant located in MN that processes imported materials and re-exports them to the UNSABoth the countries provide incentives to such manufacturing plants. UNSA provide tax benefits; whereas, MN provide compliance reliefs.
ImportA company purchases materials or parts from another company that is located in a foreign country.Manufacturers use imported raw materials due to availability of lower costs, higher quality in foreign countries or unavailability of material in the home country...

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