Question 1

________ is a term used to describe the mix of techniques used to transfer liquid funds from a foreign subsidiary to the parent company.

Accepted Answer

A)  Deferral principle 
B)  Bilateral netting 
C)  Unbundling 
D)  Multilateral netting 
A)  Deferral principle 
B)  Bilateral netting 
C)  Unbundling 
D)  Multilateral netting

Question 2

What are the nine possible combinations of the three exchange rates proposed by Lessard and Lorange in the control process?

Accepted Answer

These three exchange rates imply nine po

Question 3

Transfer price refers to the

Accepted Answer

A)  price at which goods and services are transferred to a subsidiary. 
B)  price at which the title of products is transferred to a customer. 
C)  price at which a supplier provides raw materials to a firm. 
D)  cost incurred when goods or services are transferred from one place to another. 
A)  price at which goods and services are transferred to a subsidiary. 
B)  price at which the title of products is transferred to a customer. 
C)  price at which a supplier provides raw materials to a firm. 
D)  cost incurred when goods or services are transferred from one place to another.

Question 4

Firms use fronting loans to

Accepted Answer

A)  avoid host-country restrictions on the remittance of funds from a foreign subsidiary. 
B)  implement a cost-based and fair pricing policy across an international business. 
C)  increase the profit center revenue of a subsidiary functioning in another country. 
D)  implement a market-driven and fair pricing policy across an international business. 
A)  avoid host-country restrictions on the remittance of funds from a foreign subsidiary. 
B)  implement a cost-based and fair pricing policy across an international business. 
C)  increase the profit center revenue of a subsidiary functioning in another country. 
D)  implement a market-driven and fair pricing policy across an international business.

Question 5

Of the five combinations, Lessard and Lorange recommend that firms use the ________ spot exchange rate to translate both the budget and performance figures into the corporate currency.

Accepted Answer

A)  ending 
B)  initial 
C)  final 
D)  projected 
A)  ending 
B)  initial 
C)  final 
D)  projected

Question 6

The age of a foreign subsidiary

Accepted Answer

A)  has no influence on payment of dividends. 
B)  indicates the number of capital investment needs; older subsidiaries have higher needs. 
C)  influences dividend policy in that younger subsidiaries tend to remit a higher proportion of their earnings in dividends to the parent company. 
D)  influences dividend policy in that older subsidiaries tend to remit a higher proportion of their earnings in dividends to the parent company. 
A)  has no influence on payment of dividends. 
B)  indicates the number of capital investment needs; older subsidiaries have higher needs. 
C)  influences dividend policy in that younger subsidiaries tend to remit a higher proportion of their earnings in dividends to the parent company. 
D)  influences dividend policy in that older subsidiaries tend to remit a higher proportion of their earnings in dividends to the parent company.

Question 7

Accounting standards are rules for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 8

Accounting information is the means by which firms communicate their financial position to the providers of capital.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true of the capital budgeting used in international businesses?

Accepted Answer

A)  Capital budgeting does not provide a connection between cash flows to the parent and subsidiaries. 
B)  Its basic framework is vastly different from the framework of domestic capital budgeting. 
C)  Capital budgeting does not consider the cash flows between subsidiaries of a firm. 
D)  It enables top managers to compare different investment alternatives in an objective fashion. 
A)  Capital budgeting does not provide a connection between cash flows to the parent and subsidiaries. 
B)  Its basic framework is vastly different from the framework of domestic capital budgeting. 
C)  Capital budgeting does not consider the cash flows between subsidiaries of a firm. 
D)  It enables top managers to compare different investment alternatives in an objective fashion.

Question 10

A ________ represents the remuneration paid to the owners of technology, patents, or trade names for the use of that technology or the right to manufacture and/or sell products under those patents or trade names.

Accepted Answer

A)  fronting loan 
B)  fee 
C)  royalty 
D)  transfer price 
A)  fronting loan 
B)  fee 
C)  royalty 
D)  transfer price

Question 11

Capital budgeting for a foreign project

Accepted Answer

A)  begins with an audit of the current cash flows. 
B)  is vastly different from domestic capital budgeting. 
C)  begins with converting all cash flow to Eurocurrency. 
D)  uses the same theoretical framework that domestic capital budgeting uses. 
A)  begins with an audit of the current cash flows. 
B)  is vastly different from domestic capital budgeting. 
C)  begins with converting all cash flow to Eurocurrency. 
D)  uses the same theoretical framework that domestic capital budgeting uses.

Question 12

A tax haven is a country that gives income tax exemptions to firms that export all or part of its products.

Accepted Answer

A) True 
 B)False

Question 13

According to Lessard and Lorange, the ________ rate is the spot exchange rate forecast for the end of the budget period.

Accepted Answer

A)  projected 
B)  initial 
C)  ideal 
D)  ending 
A)  projected 
B)  initial 
C)  ideal 
D)  ending

Question 14

Lessard and Lorange recommend that firms use the projected spot exchange rate to translate both the budget and performance figures into the corporate currency, combination PP.

Accepted Answer

A) True 
 B)False

Question 15

Funds can be moved out of a particular country in which a parent country has set up a subsidiary by

Accepted Answer

A)  setting high transfer prices for the goods supplied. 
B)  removing royalties imposed on the subsidiary. 
C)  charging a discounted fee on the subsidiary. 
D)  issuing loans to the subsidiary at discounted rates. 
A)  setting high transfer prices for the goods supplied. 
B)  removing royalties imposed on the subsidiary. 
C)  charging a discounted fee on the subsidiary. 
D)  issuing loans to the subsidiary at discounted rates.

Question 16

According to Lessard and Lorange, the ________ rate refers to the spot exchange rate when the budget is adopted.

Accepted Answer

A)  ending 
B)  initial 
C)  ideal 
D)  projected 
A)  ending 
B)  initial 
C)  ideal 
D)  projected

Question 17

________ allows an entity to reduce the taxes paid to the home government by the amount of taxes paid to the foreign government.

Accepted Answer

A)  An indirect tax 
B)  A tax haven 
C)  A tax credit 
D)  An internal tax 
A)  An indirect tax 
B)  A tax haven 
C)  A tax credit 
D)  An internal tax

Question 18

A German firm raising capital by selling stock through the London Stock Exchange is an example of

Accepted Answer

A)  transnational financing. 
B)  service exporting. 
C)  indirect financing. 
D)  transnational investment. 
A)  transnational financing. 
B)  service exporting. 
C)  indirect financing. 
D)  transnational investment.

Question 19

A ________ allows an entity to reduce the taxes paid to the home government by the amount of taxes paid to the foreign government.

Accepted Answer

A)  tax amnesty 
B)  tax credit 
C)  waiver 
D)  tax treaty 
A)  tax amnesty 
B)  tax credit 
C)  waiver 
D)  tax treaty

Question 20

Which of the following was formed in March 2001 to replace the International Accounting Standards Committee (IASC)?

Accepted Answer

A)  U.S. Securities and Exchange Commission 
B)  International Accounting Standards Board 
C)  Office of Economic Analysis 
D)  Financial Accounting Standards Board 
A)  U.S. Securities and Exchange Commission 
B)  International Accounting Standards Board 
C)  Office of Economic Analysis 
D)  Financial Accounting Standards Board

________ is a term used to describe the mix of techniques used to transfer liquid funds from a foreign subsidiary to the parent company.

What are the nine possible combinations of the three exchange rates proposed by Lessard and Lorange in the control process?

Transfer price refers to the

Firms use fronting loans to

Of the five combinations, Lessard and Lorange recommend that firms use the ________ spot exchange rate to translate both the budget and performance figures into the corporate currency.

The age of a foreign subsidiary

Accounting standards are rules for preparing financial statements.

Accounting information is the means by which firms communicate their financial position to the providers of capital.

Which of the following statements is true of the capital budgeting used in international businesses?

A ________ represents the remuneration paid to the owners of technology, patents, or trade names for the use of that technology or the right to manufacture and/or sell products under those patents or trade names.

Capital budgeting for a foreign project

A tax haven is a country that gives income tax exemptions to firms that export all or part of its products.

According to Lessard and Lorange, the ________ rate is the spot exchange rate forecast for the end of the budget period.

Lessard and Lorange recommend that firms use the projected spot exchange rate to translate both the budget and performance figures into the corporate currency, combination PP.

Funds can be moved out of a particular country in which a parent country has set up a subsidiary by

According to Lessard and Lorange, the ________ rate refers to the spot exchange rate when the budget is adopted.

________ allows an entity to reduce the taxes paid to the home government by the amount of taxes paid to the foreign government.

A German firm raising capital by selling stock through the London Stock Exchange is an example of

A ________ allows an entity to reduce the taxes paid to the home government by the amount of taxes paid to the foreign government.

Which of the following was formed in March 2001 to replace the International Accounting Standards Committee (IASC)?

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

________ is a term used to describe the mix of techniques used to transfer liquid funds from a foreign subsidiary to the parent company.

What are the nine possible combinations of the three exchange rates proposed by Lessard and Lorange in the control process?

Transfer price refers to the

Firms use fronting loans to

Of the five combinations, Lessard and Lorange recommend that firms use the ________ spot exchange rate to translate both the budget and performance figures into the corporate currency.

The age of a foreign subsidiary

Accounting standards are rules for preparing financial statements.

Accounting information is the means by which firms communicate their financial position to the providers of capital.

Which of the following statements is true of the capital budgeting used in international businesses?

A ________ represents the remuneration paid to the owners of technology, patents, or trade names for the use of that technology or the right to manufacture and/or sell products under those patents or trade names.

Capital budgeting for a foreign project

A tax haven is a country that gives income tax exemptions to firms that export all or part of its products.

According to Lessard and Lorange, the ________ rate is the spot exchange rate forecast for the end of the budget period.

Lessard and Lorange recommend that firms use the projected spot exchange rate to translate both the budget and performance figures into the corporate currency, combination PP.

Funds can be moved out of a particular country in which a parent country has set up a subsidiary by

According to Lessard and Lorange, the ________ rate refers to the spot exchange rate when the budget is adopted.

________ allows an entity to reduce the taxes paid to the home government by the amount of taxes paid to the foreign government.

A German firm raising capital by selling stock through the London Stock Exchange is an example of

A ________ allows an entity to reduce the taxes paid to the home government by the amount of taxes paid to the foreign government.

Which of the following was formed in March 2001 to replace the International Accounting Standards Committee (IASC)?

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