c. speeding the process by which all departments and all subsidiaries have access to the data that they need
d. making executives more accountable for financial statements by personally verifying their accuracy
e. All of these are common methods used by MNCs to improve their internal control process.
ANSWER: e
76. Which of the following is not mentioned in the text as a theory of international business?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. All of these are mentioned in the text as theories of international business.
ANSWER: d
77. When conducting international business, firms generally face the most risk when they:
a. engage in franchising.
b. make acquisitions of existing operations.
c. establish new subsidiaries.
d. engage of international trade.
e. make acquisitions of existing operations AND establish new subsidiaries.
ANSWER: e
78. The least risky method by which firms conduct international business is:
a. franchising.
b. acquisitions of existing operations.
c. international trade.
d. the establishment of new subsidiaries.
e. licensing.
ANSWER: c
79. Livingston Co. has a subsidiary in Korea. The subsidiary reinvests half of its net cash flows into operations and remits half to the parent. Livingston's expected cash flows from domestic business are $100,000, and the Korean subsidiary is expected to generate 100 million Korean won at the end of the year. The expected value of the won is $.0012. What are the expected dollar cash flows of Livingston Co.?
a. $100,000
b. $200,000
c. $160,000
d. $60,000
ANSWER: c