Question 1

Which of the following is NOT an influence affecting the operating environment of foreign subsidiaries?

Accepted Answer

A) regulatory controls 
B) social norms and attitudes 
C) inflation rates 
D) All of the above are influences. 
A) regulatory controls 
B) social norms and attitudes 
C) inflation rates 
D) All of the above are influences. D

Question 2

What measures may be used in the performance evaluation system of a multinational corporation?

Accepted Answer

A) financial measures such as profit,cost,and return on investment 
B) quality and customer satisfaction 
C) market share 
D) all of the above 
A) financial measures such as profit,cost,and return on investment 
B) quality and customer satisfaction 
C) market share 
D) all of the above D

Question 3

Schlamp & Co.is considering building a manufacturing facility in Country Z,which has changed it labor laws frequently and dramatically in the past decade. What kind of risk is created by these legislative actions?

Accepted Answer

A) physical risk 
B) political risk 
C) financial risk 
D) economic risk 
A) physical risk 
B) political risk 
C) financial risk 
D) economic risk B

Question 4

What term is used to describe the process of revising existing goals and adopting new goals?

Accepted Answer

A) strategy formulation 
B) strategic planning 
C) strategy implementation 
D) capital budgeting 
A) strategy formulation 
B) strategic planning 
C) strategy implementation 
D) capital budgeting

Question 5

In designing an effective management control system for a multinational corporation,the accountant should measure factors appropriate for each unit's level of responsibility. Which of the following measures would be appropriate for evaluating the performance of a profit center?

Accepted Answer

A) return on investment 
B) residual income 
C) EBIT 
D) all of the above 
A) return on investment 
B) residual income 
C) EBIT 
D) all of the above

Question 6

What discount rate should be used for calculating net present values of capital investment alternatives?

Accepted Answer

A) corporate borrowing rate 
B) opportunity cost of capital 
C) internal rate of return 
D) corporation's return on investment 
A) corporate borrowing rate 
B) opportunity cost of capital 
C) internal rate of return 
D) corporation's return on investment

Question 7

What is the effect of conducting a sensitivity analysis in capital budgeting?

Accepted Answer

A) It helps analysts to determine if results are particularly affected by specific estimates. 
B) It complicates the process of making a decision when there are conflicting signals. 
C) Preferences for one capital investment alternative over another will change. 
D) all of the above 
A) It helps analysts to determine if results are particularly affected by specific estimates. 
B) It complicates the process of making a decision when there are conflicting signals. 
C) Preferences for one capital investment alternative over another will change. 
D) all of the above

Question 8

Implementing multinational corporate strategy to influence human behavior in a positive way should include:

Accepted Answer

A) a target for managers that is possible under ideal conditions 
B) consideration of cultural differences across units 
C) all exchange rate gains and losses 
D) measures of profit,residual income,and return on investment for all units 
A) a target for managers that is possible under ideal conditions 
B) consideration of cultural differences across units 
C) all exchange rate gains and losses 
D) measures of profit,residual income,and return on investment for all units

Question 9

Novo Limited uses the same management control system in all of its 100 facilities throughout the world on the assumption that the culture at the home office is transferable to all other locations. What principle underlies Novo's control system?

Accepted Answer

A) polycentrism 
B) ethnocentrism 
C) geocentrism 
D) egocentrism 
A) polycentrism 
B) ethnocentrism 
C) geocentrism 
D) egocentrism

Question 10

What is the major limitation of using the payback period as a tool in capital budgeting?

Accepted Answer

A) It is difficult to calculate without a computer. 
B) It favors large investments. 
C) It ignores the time value of money. 
D) It does not consider cash flows. 
A) It is difficult to calculate without a computer. 
B) It favors large investments. 
C) It ignores the time value of money. 
D) It does not consider cash flows.

Question 11

Under what condition should the gain or loss from translating foreign currency profit of subsidiary into the parent's home currency be included in the subsidiary's measure of performance?

Accepted Answer

A) if the subsidiary manager is authorized to hedge the translation exposure 
B) if there is a translation gain,but not if there is a translation loss 
C) if the multinational corporation is using the same method of translation for performance evaluation as it does for financial reporting 
D) if the impact on cash flows from foreign exchange is minimal 
A) if the subsidiary manager is authorized to hedge the translation exposure 
B) if there is a translation gain,but not if there is a translation loss 
C) if the multinational corporation is using the same method of translation for performance evaluation as it does for financial reporting 
D) if the impact on cash flows from foreign exchange is minimal

Question 12

Cash flows related to a proposed capital investment project are subject to what kind of risk?

Accepted Answer

A) economic risk 
B) financial risk 
C) political risk 
D) all of the above 
A) economic risk 
B) financial risk 
C) political risk 
D) all of the above

Question 13

Estimating the expected cash inflows and outflows from proposed projects is performed in what step of the capital budgeting process?

Accepted Answer

A) project identification 
B) project evaluation 
C) project monitoring 
D) project review 
A) project identification 
B) project evaluation 
C) project monitoring 
D) project review

Question 14

Assume that the Chinese government allowed the yuan to float relative to the U.S.dollar. Appreciation in the yuan could have an adverse affect on sales of Chinese goods to the U.S. This possible impact on Chinese exports is referred to as:

Accepted Answer

A) translation exposure 
B) transaction exposure 
C) economic exposure 
D) accounting exposure 
A) translation exposure 
B) transaction exposure 
C) economic exposure 
D) accounting exposure

Question 15

Why is the multinational capital budgeting process more complex than capital budgeting in a domestic environment?

Accepted Answer

A) Cash flows must be predicted. 
B) An appropriate discount rate must be selected. 
C) There are additional risks involved. 
D) The payback period is shorter. 
A) Cash flows must be predicted. 
B) An appropriate discount rate must be selected. 
C) There are additional risks involved. 
D) The payback period is shorter.

Question 16

What is a capital investment?

Accepted Answer

A) using money to buy goods or services 
B) issuing shares of stock of the corporation 
C) authorizing and issuing shares of common stock by a multinational corporation 
D) committing resources to projects that have costs and benefits well into the future 
A) using money to buy goods or services 
B) issuing shares of stock of the corporation 
C) authorizing and issuing shares of common stock by a multinational corporation 
D) committing resources to projects that have costs and benefits well into the future

Question 17

Which of the following is a non-financial measure of performance?

Accepted Answer

A) return on investment 
B) market share 
C) earnings per share 
D) return on equity 
A) return on investment 
B) market share 
C) earnings per share 
D) return on equity

Question 18

What is a plan for next year expressed in quantitative terms?

Accepted Answer

A) strategy 
B) capital budget 
C) operating budget 
D) management control system 
A) strategy 
B) capital budget 
C) operating budget 
D) management control system

Question 19

How is the payback period used in capital budgeting?

Accepted Answer

A) as a measure of a project's risk 
B) to determine the amount of funds that will be required in the future 
C) to measure the relationship between the project's return and the company's cost of capital 
D) None of the above 
A) as a measure of a project's risk 
B) to determine the amount of funds that will be required in the future 
C) to measure the relationship between the project's return and the company's cost of capital 
D) None of the above

Question 20

A unit of a multinational corporation that produces little or no knowledge but rather uses the ideas and processes developed by other units is referred to as a(n):

Accepted Answer

A) implementer. 
B) local innovator. 
C) integrated player. 
D) team player. 
A) implementer. 
B) local innovator. 
C) integrated player. 
D) team player.

Which of the following is NOT an influence affecting the operating environment of foreign subsidiaries?

What measures may be used in the performance evaluation system of a multinational corporation?

Schlamp & Co.is considering building a manufacturing facility in Country Z,which has changed it labor laws frequently and dramatically in the past decade. What kind of risk is created by these legislative actions?

What term is used to describe the process of revising existing goals and adopting new goals?

In designing an effective management control system for a multinational corporation,the accountant should measure factors appropriate for each unit's level of responsibility. Which of the following measures would be appropriate for evaluating the performance of a profit center?

What discount rate should be used for calculating net present values of capital investment alternatives?

What is the effect of conducting a sensitivity analysis in capital budgeting?

Implementing multinational corporate strategy to influence human behavior in a positive way should include:

Novo Limited uses the same management control system in all of its 100 facilities throughout the world on the assumption that the culture at the home office is transferable to all other locations. What principle underlies Novo's control system?

What is the major limitation of using the payback period as a tool in capital budgeting?

Under what condition should the gain or loss from translating foreign currency profit of subsidiary into the parent's home currency be included in the subsidiary's measure of performance?

Cash flows related to a proposed capital investment project are subject to what kind of risk?

Estimating the expected cash inflows and outflows from proposed projects is performed in what step of the capital budgeting process?

Assume that the Chinese government allowed the yuan to float relative to the U.S.dollar. Appreciation in the yuan could have an adverse affect on sales of Chinese goods to the U.S. This possible impact on Chinese exports is referred to as:

Why is the multinational capital budgeting process more complex than capital budgeting in a domestic environment?

What is a capital investment?

Which of the following is a non-financial measure of performance?

What is a plan for next year expressed in quantitative terms?

How is the payback period used in capital budgeting?

A unit of a multinational corporation that produces little or no knowledge but rather uses the ideas and processes developed by other units is referred to as a(n):

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters

Exam 13: Strategic Accounting Issues in Multinational Corporations

Which of the following is NOT an influence affecting the operating environment of foreign subsidiaries?

What measures may be used in the performance evaluation system of a multinational corporation?

Schlamp & Co.is considering building a manufacturing facility in Country Z,which has changed it labor laws frequently and dramatically in the past decade. What kind of risk is created by these legislative actions?

What term is used to describe the process of revising existing goals and adopting new goals?

In designing an effective management control system for a multinational corporation,the accountant should measure factors appropriate for each unit's level of responsibility. Which of the following measures would be appropriate for evaluating the performance of a profit center?

What discount rate should be used for calculating net present values of capital investment alternatives?

What is the effect of conducting a sensitivity analysis in capital budgeting?

Implementing multinational corporate strategy to influence human behavior in a positive way should include:

Novo Limited uses the same management control system in all of its 100 facilities throughout the world on the assumption that the culture at the home office is transferable to all other locations. What principle underlies Novo's control system?

What is the major limitation of using the payback period as a tool in capital budgeting?

Under what condition should the gain or loss from translating foreign currency profit of subsidiary into the parent's home currency be included in the subsidiary's measure of performance?

Cash flows related to a proposed capital investment project are subject to what kind of risk?

Estimating the expected cash inflows and outflows from proposed projects is performed in what step of the capital budgeting process?

Assume that the Chinese government allowed the yuan to float relative to the U.S.dollar. Appreciation in the yuan could have an adverse affect on sales of Chinese goods to the U.S. This possible impact on Chinese exports is referred to as:

Why is the multinational capital budgeting process more complex than capital budgeting in a domestic environment?

What is a capital investment?

Which of the following is a non-financial measure of performance?

What is a plan for next year expressed in quantitative terms?

How is the payback period used in capital budgeting?

A unit of a multinational corporation that produces little or no knowledge but rather uses the ideas and processes developed by other units is referred to as a(n):

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters