Question 1

Which of the following financing methods entails the greatest risk for importers?

Accepted Answer

A) documentary collection 
B) advance payment 
C) letter of credit 
D) open account 
A) documentary collection 
B) advance payment 
C) letter of credit 
D) open account

Question 2

Which of the following is an investment entry mode?

Accepted Answer

A) licensing 
B) franchising 
C) joint venture 
D) turnkey project 
A) licensing 
B) franchising 
C) joint venture 
D) turnkey project

Question 3

Countertrade provides a way for firms to trade either by using a small amount of hard currency or even none at all.

Accepted Answer

A) True 
 B)False

Question 4

Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc.,a business that develops,manufactures,and markets sports products.The company is looking to expand its operations into the European market.Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe,the company will achieve success there.
-The board of directors of Sports Stuff is concerned with the firm's lack of experience in foreign markets.To minimize this problem,Herb recommends that the firm create a ________ with a local partner.

Accepted Answer

A) joint venture 
B) turnkey project 
C) wholly owned subsidiary 
D) franchise 
A) joint venture 
B) turnkey project 
C) wholly owned subsidiary 
D) franchise

Question 5

Why would an exporter use a sales representative or a distributor? Why would the exporter be reluctant to offer an open account payment method?

Accepted Answer

Some companies become deeply involved in

Question 6

Which of the following is a contractual entry mode in which one company supplies another with intangible property and other assistance over an extended period?

Accepted Answer

A) franchising 
B) management contract 
C) licensing 
D) strategic alliance 
A) franchising 
B) management contract 
C) licensing 
D) strategic alliance

Question 7

Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc.,a business that develops,manufactures,and markets sports products.The company is looking to expand its operations into the European market.Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe,the company will achieve success there.
-Herb knows that much of the success his company enjoys is due to the patents and copyrights that protect the company's products.If Sports Stuff chooses an entry mode in which it grants another firm the right to use its intangible property for a specified period of time,it would be engaging in ________.

Accepted Answer

A) a turnkey project 
B) franchising 
C) licensing 
D) a joint venture 
A) a turnkey project 
B) franchising 
C) licensing 
D) a joint venture

Question 8

Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc.,a business that develops,manufactures,and markets sports products.The company is looking to expand its operations into the European market.Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe,the company will achieve success there.
-Herb has been exploring another type of entry mode that requires ongoing assistance on the part of one firm,often in the form of start-up capital,management training,or location advice.Herb is most likely considering ________.

Accepted Answer

A) a strategic alliance 
B) franchising 
C) licensing 
D) a joint venture 
A) a strategic alliance 
B) franchising 
C) licensing 
D) a joint venture

Question 9

Advance payment is commonly used for export/import financing when ________.

Accepted Answer

A) two parties are unfamiliar with each other 
B) the buyer has obtained credit for the transaction 
C) the transaction is for a relatively high amount 
D) the buyer has good credit rating at banks 
A) two parties are unfamiliar with each other 
B) the buyer has obtained credit for the transaction 
C) the transaction is for a relatively high amount 
D) the buyer has good credit rating at banks

Question 10

Low tariffs and high quota limits encourage market entry by means of investment.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following refers to the exchange of goods or services directly for other goods or services without the use of money?

Accepted Answer

A) offset 
B) barter 
C) counterpurchase 
D) switch trading 
A) offset 
B) barter 
C) counterpurchase 
D) switch trading

Question 12

Scenario: Wang's Techno Toys
Ann Wang has been successfully running Wang's Techno Toys that sells high-tech toys in the domestic market.Continually increasing and stiff competition at home has now forced Wang's Techno Toys to enter international markets through direct exports.
-In some countries,people exchange electronic goods for Techno Toys instead of paying money for them.This practice is known as ________.

Accepted Answer

A) offset 
B) counterpurchase 
C) switch trading 
D) barter 
A) offset 
B) counterpurchase 
C) switch trading 
D) barter

Question 13

________ is a countertrade whereby one company sells to another its obligation to make a purchase in a given country.

Accepted Answer

A) Franchising 
B) Joint venture 
C) Switch trading 
D) Barter 
A) Franchising 
B) Joint venture 
C) Switch trading 
D) Barter

Question 14

Which of the following refers to a contract between the exporter and shipper that specifies merchandise destination and shipping costs?

Accepted Answer

A) sight draft 
B) bill of lading 
C) letter of credit 
D) bill of exchange 
A) sight draft 
B) bill of lading 
C) letter of credit 
D) bill of exchange

Question 15

Buyback is defined as ________.

Accepted Answer

A) the export of industrial equipment in return for products produced by that equipment 
B) an agreement that a company will offset a hard-currency sale to a nation by making a hard-currency purchase of an unspecified product from that nation in the future 
C) the sale of goods or services to a country by a company that promises to make a future purchase of a specific product from that country 
D) the exchange of goods or services for a certain amount of money 
A) the export of industrial equipment in return for products produced by that equipment 
B) an agreement that a company will offset a hard-currency sale to a nation by making a hard-currency purchase of an unspecified product from that nation in the future 
C) the sale of goods or services to a country by a company that promises to make a future purchase of a specific product from that country 
D) the exchange of goods or services for a certain amount of money

Question 16

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors?

Accepted Answer

A) identification of a potential market 
B) match market needs to the company's abilities 
C) initiation of meetings 
D) commitment of resources 
A) identification of a potential market 
B) match market needs to the company's abilities 
C) initiation of meetings 
D) commitment of resources

Question 17

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Accepted Answer

A) indirect exporting 
B) counterpurchase 
C) an acquisition 
D) a joint venture 
A) indirect exporting 
B) counterpurchase 
C) an acquisition 
D) a joint venture

Question 18

Export/import financing in which an exporter ships merchandise and later bills the importer for its value is called ________.

Accepted Answer

A) advance payment 
B) open account 
C) a letter of credit 
D) documentary collection 
A) advance payment 
B) open account 
C) a letter of credit 
D) documentary collection

Question 19

Products for which there are fewer substitutes can more easily absorb higher shipping and production costs.

Accepted Answer

A) True 
 B)False

Question 20

A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Accepted Answer

A) True 
 B)False

Which of the following financing methods entails the greatest risk for importers?

Which of the following is an investment entry mode?

Countertrade provides a way for firms to trade either by using a small amount of hard currency or even none at all.

Why would an exporter use a sales representative or a distributor? Why would the exporter be reluctant to offer an open account payment method?

Which of the following is a contractual entry mode in which one company supplies another with intangible property and other assistance over an extended period?

Advance payment is commonly used for export/import financing when ________.

Low tariffs and high quota limits encourage market entry by means of investment.

Which of the following refers to the exchange of goods or services directly for other goods or services without the use of money?

________ is a countertrade whereby one company sells to another its obligation to make a purchase in a given country.

Which of the following refers to a contract between the exporter and shipper that specifies merchandise destination and shipping costs?

Buyback is defined as ________.

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors?

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Export/import financing in which an exporter ships merchandise and later bills the importer for its value is called ________.

Products for which there are fewer substitutes can more easily absorb higher shipping and production costs.

A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Globalization

Cross-Cultural Business

Politics, Law, and Business Ethics

Economics and Emerging Markets

International Trade

Business-Government Trade Relations

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Money System

International Strategy and Organization

Analyzing International Opportunities

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters

Exam 13: Selecting and Managing Entry Modes

Which of the following financing methods entails the greatest risk for importers?

Which of the following is an investment entry mode?

Countertrade provides a way for firms to trade either by using a small amount of hard currency or even none at all.

Why would an exporter use a sales representative or a distributor? Why would the exporter be reluctant to offer an open account payment method?

Which of the following is a contractual entry mode in which one company supplies another with intangible property and other assistance over an extended period?

Advance payment is commonly used for export/import financing when ________.

Low tariffs and high quota limits encourage market entry by means of investment.

Which of the following refers to the exchange of goods or services directly for other goods or services without the use of money?

________ is a countertrade whereby one company sells to another its obligation to make a purchase in a given country.

Which of the following refers to a contract between the exporter and shipper that specifies merchandise destination and shipping costs?

Buyback is defined as ________.

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors?

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Export/import financing in which an exporter ships merchandise and later bills the importer for its value is called ________.

Products for which there are fewer substitutes can more easily absorb higher shipping and production costs.

A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Globalization

Cross-Cultural Business

Politics, Law, and Business Ethics

Economics and Emerging Markets

International Trade

Business-Government Trade Relations

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Money System

International Strategy and Organization

Analyzing International Opportunities

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters