18 Questions
How do improvements in Information Technology (IT) impact financial management practices?
Reduce the risk of financial decisions by using historical data
What do most firms today have to ensure ethical behavior among employees?
Strong written codes of ethical behavior
What is one way outsourcing can occur for domestic firms?
Investing and producing goods in foreign countries
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
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
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
Why do most large corporations operate on a global basis?
To increase profitability
What is one of the important business trends mentioned in the text?
Outsourcing
How do corporations mainly raise capital?
By selling securities like bonds and common stock
Why is taxation mentioned as a disadvantage for corporations?
Corporations pay taxes on income they have earned
What is a key advantage for corporations in selling stock?
It provides capital for expansion
Why is registration of public companies with the SEC mentioned as a disadvantage?
It can be time-consuming and costly
What motivates corporations to build plants and produce goods abroad?
Low-cost labor and competitive price advantage
What is one of the reasons for corporations to develop a presence abroad?
To reduce overall fluctuations in sales and earnings
How can diversification abroad help reduce risk exposure for corporations?
By dampening the fluctuations of sales and earnings
What provides managers with new tools for hedging and minimizing foreign risks?
Financial instruments like futures and swap agreements
How does competition intensify with the emergence of foreign industrial power?
By providing lower-priced goods for import to domestic markets
What is a requirement for domestic firms to benefit from the profitable opportunities provided by globalization?
Highly skillful financial management
This quiz explores the various motivations behind companies deciding to build plants and produce goods abroad, including low-cost labor, efficient technology transfer, market expansion, and risk hedging strategies.
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