Motivations for Building Plants and Producing Goods Abroad Quiz

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How do improvements in Information Technology (IT) impact financial management practices?

Increase the guesswork in financial decision-making

Limit access to data for financial predictions

Reduce the risk of financial decisions by using historical data (correct)

Have no effect on financial decision-making

What do most firms today have to ensure ethical behavior among employees?

Lack of training programs

No emphasis on ethical behavior

Encouragement of unethical practices

Strong written codes of ethical behavior (correct)

What is one way outsourcing can occur for domestic firms?

Importing cheap foreign products

Relocating corporate headquarters

Building and producing goods domestically

Investing and producing goods in foreign countries (correct)

How does the use of historical data benefit Double-Dragon Corporation in site selection for new malls?

Predict results at the proposed site and reduce investment risk Signup and view all the answers

How has the Securities and Exchange Commission (SEC) made it easier for activist shareholders to influence firms?

By having jurisdiction over shareholders and required information disclosure Signup and view all the answers

Why are growing competitive pressures leading domestic firms to invest abroad or rely on importing foreign products?

To cope with competitive pressures and reduce costs Signup and view all the answers

Why do most large corporations operate on a global basis?

To increase profitability Signup and view all the answers

What is one of the important business trends mentioned in the text?

Outsourcing Signup and view all the answers

How do corporations mainly raise capital?

By selling securities like bonds and common stock Signup and view all the answers

Why is taxation mentioned as a disadvantage for corporations?

Corporations pay taxes on income they have earned Signup and view all the answers

What is a key advantage for corporations in selling stock?

It provides capital for expansion Signup and view all the answers

Why is registration of public companies with the SEC mentioned as a disadvantage?

It can be time-consuming and costly Signup and view all the answers

What motivates corporations to build plants and produce goods abroad?

Low-cost labor and competitive price advantage Signup and view all the answers

What is one of the reasons for corporations to develop a presence abroad?

To reduce overall fluctuations in sales and earnings Signup and view all the answers

How can diversification abroad help reduce risk exposure for corporations?

By dampening the fluctuations of sales and earnings Signup and view all the answers

What provides managers with new tools for hedging and minimizing foreign risks?

Financial instruments like futures and swap agreements Signup and view all the answers

How does competition intensify with the emergence of foreign industrial power?

By providing lower-priced goods for import to domestic markets Signup and view all the answers

What is a requirement for domestic firms to benefit from the profitable opportunities provided by globalization?

Highly skillful financial management Signup and view all the answers

Motivations for Building Plants and Producing Goods Abroad Quiz

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