International Financial Management
14th Edition
ISBN: 9780357130698
Author: Madura
Publisher: Cengage
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Students have asked these similar questions
1. Supposed a company plans to expand its business abroad, what are the risks it might encounter?
2. What are the needed policy interventions that must be imposed upon doing business internationally?
What is the disadvantage of international accounting ?
Select one :
a . uniformity practice b . Harmonization c . Mobilising global resources d . Market risk
Compared to other methods of international business, exporting generally results in ____ exposure to international political risk and ____ exposure to international economic conditions.
A.
higher; lower
B.
lower; higher
C.
higher; higher
D.
lower; lower
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- Which of the following is not a reason for U.S. firms operating in foreign markets? A.Better economic and political environment (in the U.S.) B.Less expensive labor C.Tax incentives D. To achieve international diversificationarrow_forwardCompanies that compete in an international marketplace may be faced with three types of risk owing to foreign exchange.These are: * A. specific, translation and transaction risk. B. translation, transaction and economic risk. C. accounting, transaction and translation risk. D. accounting, specific and transaction risk.arrow_forwarddiscuss any four factors that foreign direct investment (FDI) consider when evaluating the political risk associated in a foreign countryarrow_forward
- Increased global interaction has been promoted by advanced technology in communication, ideas and culture, which largely encourages and facilitates international trading. Businesses go abroad in seeking better financial incentives, stronger networks, and markets of opportunities. But at the same time, the complexities in terms or risks involved in international operation are more than domestic firms. How to manage cultural risks and other factors related to a foreign operation of a multinational business. Is cultural, business, or political risk more challenging to overcome than one of the others? Why or why not? How should American standards influence multinational businesses?arrow_forward1- How important is a foreign direct investment to the world economy? 2- What financial reporting issues arise as a result of making a foreign direct investment? 3- What are some of the issues that arise in evaluating and maintaining control over foreign operations?arrow_forwardThe complexity posed by differences in the cultural, political, legal, and economic environments creates a so-called “liability of foreignness.” This idea holds that foreign companies, because of their poorer familiarity with local conditions, incur additional costs. In theory, the liability of foreignness makes IB activity too expensive. In practice, companies offset this liability by capitalizing on their unique advantages as well as selecting the mode of international business that best reflects their resource profile and risk tolerance--Always in the effort toward minimizing the intrinsic higher costs of international operations. The higher costs of international operations, executives point out, are driven by things as varied as the cost of legally establishing businesses, real estate costs, customs duties, and translation costs. Managing these costs is complicated by the report that _53_______%___ of global CEOs are concerned about the impact of __bribery and…arrow_forward
- Investors and MNCs exporting or importing goods and services or making foreign investments throughout the global economy are faced with an exchange rate risk,which can have severe financial consequences on firms profitability,cash flows,and their market value,if not managed appropriately. MNC's use a number of external techniques of risk(exposure)management and resort to contractual relationships outside thier companies in order to reduce (or redistribute)the risk of foreign exchange losses.What are the determinants of hedging currency risk or foreign exchange exposures which pose risks to MNC's cashflows,competitiveness,marker value and financial reporting.arrow_forwardEntry modes for entering new countries vary in their degree of control. What does control mean? O The degree of risk a firm has in its foreign activities The degree of ownership a firm has in its foreign activities O The degree of profits a firm has in its foreign activities O The degree of influence a firm has in its foreign activitiesarrow_forwardWhat are the differences in country risks that affect international financial management?arrow_forward
- Demonstrate competence in words the theory & evolution of international trade with emphasis on comparative advantage. Formulate a deeper understanding of comparative advantage including the impact of government intervention of comparative advantage.arrow_forwardWhich of the following environmental factors can affect thecost of doing business in a foreign country? (Identify allcorrect answers.)a. The educational level of the workforce.b. Laws regulating the transfer of profits out of a country.c. Tax and tariff regulations.d. Restricted access to communication and transportationnetworks.arrow_forwardGlobalisation is the process by which businesses or other organizations developinternational influence or start operating on an international scale. Examine the role International monetary fund (IMF) plays in the Worldfinancial Systemarrow_forward
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