Question 1

What are the considerations when seeking external financing for international business?

Accepted Answer

If external financing is required, the f

Question 2

Most international businesses require all budgets and performance data within the firm to be expressed in the "corporate currency," which is normally

Accepted Answer

A)  a common currency such as the U.S. dollar. 
B)  the home currency. 
C)  a foreign currency. 
D)  the currency of the country where products are sold. 
A)  a common currency such as the U.S. dollar. 
B)  the home currency. 
C)  a foreign currency. 
D)  the currency of the country where products are sold.

Question 3

The initial rate, in the Lessard-Lorange model, refers to the spot exchange rate when the budget is adopted.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true of tax havens?

Accepted Answer

A)  Firms that export to tax havens get special tax concessions from home governments. 
B)  Firms would require huge capital investments to start business in tax havens. 
C)  Nations such as the United States are widely regarded as tax havens. 
D)  Firms can save taxes by establishing a nonoperating subsidiary in the tax haven. 
A)  Firms that export to tax havens get special tax concessions from home governments. 
B)  Firms would require huge capital investments to start business in tax havens. 
C)  Nations such as the United States are widely regarded as tax havens. 
D)  Firms can save taxes by establishing a nonoperating subsidiary in the tax haven.

Question 5

Describe the problem of blocked earnings.

Accepted Answer

When evaluating a foreign investment opp

Question 6

The ________ is the main instrument of financial control in an organization.

Accepted Answer

A)  chief financial officer 
B)  corporate accounting 
C)  audit 
D)  budget 
A)  chief financial officer 
B)  corporate accounting 
C)  audit 
D)  budget

Question 7

Which of the following is a disadvantage of comparing managers in different countries only on the basis of return on investment (ROI)?

Accepted Answer

A)  The managers are not responsible for increasing the ROI of an organization. 
B)  Managerial actions do not have a significant impact on firms' profitability. 
C)  Return on investment is not a valid indicator of organizational profitability. 
D)  Environmental factors also contribute to ROI of firms and these factors differ. 
A)  The managers are not responsible for increasing the ROI of an organization. 
B)  Managerial actions do not have a significant impact on firms' profitability. 
C)  Return on investment is not a valid indicator of organizational profitability. 
D)  Environmental factors also contribute to ROI of firms and these factors differ.

Question 8

The International Accounting Standards Board

Accepted Answer

A)  can issue a new accounting standard if the majority of the board members agree. 
B)  was formed to replace the Financial Accounting Standards Board. 
C)  develops standards but has no power to enforce the standards. 
D)  was formed to supervise the accounting practices that U.S. firms follow. 
A)  can issue a new accounting standard if the majority of the board members agree. 
B)  was formed to replace the Financial Accounting Standards Board. 
C)  develops standards but has no power to enforce the standards. 
D)  was formed to supervise the accounting practices that U.S. firms follow.

Question 9

What are the shortcomings of IASB?

Accepted Answer

To issue a new standard, 75 percent of t

Question 10

Capital budgeting is the technique financial managers use to try to quantify the benefits, costs, and risks of an investment.

Accepted Answer

A) True 
 B)False

Question 11

What is an accounting problem that only international businesses face?

Accepted Answer

A)  lack of consistency in the accounting standards 
B)  inaccurate filing of profit-and-loss statements 
C)  false reporting of income to the government 
D)  lack of a dedicated accounting function within the firm 
A)  lack of consistency in the accounting standards 
B)  inaccurate filing of profit-and-loss statements 
C)  false reporting of income to the government 
D)  lack of a dedicated accounting function within the firm

Question 12

________ are the most important source of external capital for business enterprises in the United States.

Accepted Answer

A)  Stocks or bonds 
B)  World Bank loans 
C)  Banks 
D)  Venture capitalists 
A)  Stocks or bonds 
B)  World Bank loans 
C)  Banks 
D)  Venture capitalists

Question 13

Accounting is shaped by the environment in which it operates.

Accepted Answer

A) True 
 B)False

Question 14

Royalties and fees have certain tax advantages over ________, particularly when the corporate tax rate is higher in the host country than in the parent's home country.

Accepted Answer

A)  transaction costs 
B)  deferrals 
C)  dividends 
D)  transfer fees 
A)  transaction costs 
B)  deferrals 
C)  dividends 
D)  transfer fees

Question 15

Transnational financing occurs when a firm based in one country enters another country to raise capital

Accepted Answer

A)  by borrowing from financial institutions. 
B)  from the sale of stocks or bonds. 
C)  by borrowing from banks. 
D)  through exchange policies of governments. 
A)  by borrowing from financial institutions. 
B)  from the sale of stocks or bonds. 
C)  by borrowing from banks. 
D)  through exchange policies of governments.

Question 16

Financial management in an international business includes three sets of related decisions. Which of these involves making decisions about what activities to finance?

Accepted Answer

A)  investment decisions 
B)  money management decisions 
C)  multilateral decisions 
D)  financing decisions 
A)  investment decisions 
B)  money management decisions 
C)  multilateral decisions 
D)  financing decisions

Question 17

Lessard and Lorange refer to the company-generated forecast of future spot rates as the ________ rate.

Accepted Answer

A)  forward exchange 
B)  internal forward 
C)  initial exchange 
D)  ending exchange 
A)  forward exchange 
B)  internal forward 
C)  initial exchange 
D)  ending exchange

Question 18

Political risk tends to be

Accepted Answer

A)  greater in countries experiencing social unrest or disorder. 
B)  negligible for large multinational companies. 
C)  less in countries experiencing social unrest or disorder. 
D)  a consideration only for companies operating in third world countries. 
A)  greater in countries experiencing social unrest or disorder. 
B)  negligible for large multinational companies. 
C)  less in countries experiencing social unrest or disorder. 
D)  a consideration only for companies operating in third world countries.

Question 19

A tax haven is a country

Accepted Answer

A)  where companies benefit from establishing fully operating subsidiaries. 
B)  that does not charge local companies for importing products from other countries. 
C)  that does not charge taxes on the purchase or sale of any items. 
D)  with an exceptionally low, or even no, income tax. 
A)  where companies benefit from establishing fully operating subsidiaries. 
B)  that does not charge local companies for importing products from other countries. 
C)  that does not charge taxes on the purchase or sale of any items. 
D)  with an exceptionally low, or even no, income tax.

Question 20

Describe the importance of accounting information in business.

Accepted Answer

Accounting has often been referred to as

What are the considerations when seeking external financing for international business?

Most international businesses require all budgets and performance data within the firm to be expressed in the "corporate currency," which is normally

The initial rate, in the Lessard-Lorange model, refers to the spot exchange rate when the budget is adopted.

Which of the following statements is true of tax havens?

Describe the problem of blocked earnings.

The ________ is the main instrument of financial control in an organization.

Which of the following is a disadvantage of comparing managers in different countries only on the basis of return on investment (ROI)?

The International Accounting Standards Board

What are the shortcomings of IASB?

Capital budgeting is the technique financial managers use to try to quantify the benefits, costs, and risks of an investment.

What is an accounting problem that only international businesses face?

________ are the most important source of external capital for business enterprises in the United States.

Accounting is shaped by the environment in which it operates.

Royalties and fees have certain tax advantages over ________, particularly when the corporate tax rate is higher in the host country than in the parent's home country.

Transnational financing occurs when a firm based in one country enters another country to raise capital

Financial management in an international business includes three sets of related decisions. Which of these involves making decisions about what activities to finance?

Lessard and Lorange refer to the company-generated forecast of future spot rates as the ________ rate.

Political risk tends to be

A tax haven is a country

Describe the importance of accounting information in business.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Filters

Exam 20: Accounting and Finance in the International Business

What are the considerations when seeking external financing for international business?

Most international businesses require all budgets and performance data within the firm to be expressed in the "corporate currency," which is normally

The initial rate, in the Lessard-Lorange model, refers to the spot exchange rate when the budget is adopted.

Which of the following statements is true of tax havens?

Describe the problem of blocked earnings.

The ________ is the main instrument of financial control in an organization.

Which of the following is a disadvantage of comparing managers in different countries only on the basis of return on investment (ROI)?

The International Accounting Standards Board

What are the shortcomings of IASB?

Capital budgeting is the technique financial managers use to try to quantify the benefits, costs, and risks of an investment.

What is an accounting problem that only international businesses face?

________ are the most important source of external capital for business enterprises in the United States.

Accounting is shaped by the environment in which it operates.

Royalties and fees have certain tax advantages over ________, particularly when the corporate tax rate is higher in the host country than in the parent's home country.

Transnational financing occurs when a firm based in one country enters another country to raise capital

Financial management in an international business includes three sets of related decisions. Which of these involves making decisions about what activities to finance?

Lessard and Lorange refer to the company-generated forecast of future spot rates as the ________ rate.

Political risk tends to be

A tax haven is a country

Describe the importance of accounting information in business.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Filters