Question 1

What is cultural proximity?

Accepted Answer

A) similarity of values,expectations,and traditions between one country and another 
B) countries that are located on the same continent 
C) relative importance of individual differences among units of a multinational corporation 
D) a short geographic distance between the host country of one subsidiary and the host country of another subsidiary 
A) similarity of values,expectations,and traditions between one country and another 
B) countries that are located on the same continent 
C) relative importance of individual differences among units of a multinational corporation 
D) a short geographic distance between the host country of one subsidiary and the host country of another subsidiary

Question 2

A company that recognizes and adapts its business practices to differences across cultures in which it operates is referred to as being:

Accepted Answer

A) geocentric. 
B) ethnocentric. 
C) polycentric. 
D) egocentric. 
A) geocentric. 
B) ethnocentric. 
C) polycentric. 
D) egocentric.

Question 3

According to surveys in the U.S.and the United Kingdom,what are the most frequently used financial performance measures by multinational organizations?

Accepted Answer

A) stock price,return on investment,profit 
B) budgeted profit vs.actual profit,stock price,sales 
C) budgeted profit vs.actual profit,return on investment,profit 
D) internal rate of return,profit,return on investment 
A) stock price,return on investment,profit 
B) budgeted profit vs.actual profit,stock price,sales 
C) budgeted profit vs.actual profit,return on investment,profit 
D) internal rate of return,profit,return on investment

Question 4

Which of the following factors is NOT considered in performing the environmental analysis phase of strategy formulation?

Accepted Answer

A) competitors 
B) government regulations 
C) core competencies 
D) customer demand 
A) competitors 
B) government regulations 
C) core competencies 
D) customer demand

Question 5

How can a multinational enterprise incorporate its perception of high level of risk into its capital budgeting process?

Accepted Answer

A) conservative estimates of cash inflows 
B) liberal estimates of expected cash outflows 
C) high discount rate 
D) all of the above 
A) conservative estimates of cash inflows 
B) liberal estimates of expected cash outflows 
C) high discount rate 
D) all of the above

Question 6

What result can be expected if a management control system encourages managers to focus on inappropriate measures?

Accepted Answer

A) Managers will work extra hard to achieve the targets set in terms of those measures. 
B) Managers will engage in dysfunctional behaviors. 
C) Profits will go up for the foreign operation and for the corporation as a whole. 
D) none of the above 
A) Managers will work extra hard to achieve the targets set in terms of those measures. 
B) Managers will engage in dysfunctional behaviors. 
C) Profits will go up for the foreign operation and for the corporation as a whole. 
D) none of the above

Question 7

Why is depreciation added to net income to determine cash flow from operations?

Accepted Answer

A) to compensate for financial risk 
B) because depreciation is an expense but does not represent a cash flow 
C) It is standard procedure when capital budgeting for a multinational corporation. 
D) Net income is understated due to excessive depreciation. 
A) to compensate for financial risk 
B) because depreciation is an expense but does not represent a cash flow 
C) It is standard procedure when capital budgeting for a multinational corporation. 
D) Net income is understated due to excessive depreciation.

Question 8

What term is used to describe a unit of a multinational corporation that takes a leading role in a particular area?

Accepted Answer

A) implementer 
B) global innovator 
C) local innovator 
D) integrated player 
A) implementer 
B) global innovator 
C) local innovator 
D) integrated player

Question 9

When a unit of a multinational corporation develops knowledge that can be used by other units within the organization,that unit is called a(n):

Accepted Answer

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

Question 10

The process of identifying,evaluating,and selecting projects that require substantial amounts of resources and are expected to generate benefits for many years into the future is called:

Accepted Answer

A) strategy formulation. 
B) strategic planning. 
C) capital budgeting. 
D) operational budgeting. 
A) strategy formulation. 
B) strategic planning. 
C) capital budgeting. 
D) operational budgeting.

Question 11

The possibility of loss due to unexpected changes in currency values or interest rates is called:

Accepted Answer

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

Question 12

Hyperinflation causes what kind of risk for a multinational corporation?

Accepted Answer

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

Question 13

What is the likely outcome of using performance measures that subsidiary managers perceive to be unachievable?

Accepted Answer

A) frustrated managers 
B) diligent attention to operational efficiency 
C) success 
D) optimal decision-making 
A) frustrated managers 
B) diligent attention to operational efficiency 
C) success 
D) optimal decision-making

Question 14

Which of the following is the role of a performance evaluation system in a multinational corporation?

Accepted Answer

A) monitor organizational effectiveness 
B) identify areas that need improvement 
C) assess how well division managers are doing 
D) all of the above 
A) monitor organizational effectiveness 
B) identify areas that need improvement 
C) assess how well division managers are doing 
D) all of the above

Question 15

Which of the following should NOT be included in implementing performance evaluation systems?

Accepted Answer

A) Feedback and review 
B) Fair and achievable measures 
C) Understandability 
D) Changing systems annually 
A) Feedback and review 
B) Fair and achievable measures 
C) Understandability 
D) Changing systems annually

Question 16

Assume that an initial investment is $100,000 and that the estimated annual cash flows for the next 5 years are $18,000. What is the internal rate of return (IRR)for this investment?

Accepted Answer

A) 5)56% 
B) 18% 
C) 1% 
D) It is impossible to calculate without additional information. 
A) 5)56% 
B) 18% 
C) 1% 
D) It is impossible to calculate without additional information.

Question 17

Influencing subordinates to behave in accordance with the goals and objectives of the organization is referred to as:

Accepted Answer

A) performance evaluation. 
B) management control. 
C) strategic planning. 
D) goal congruence . 
A) performance evaluation. 
B) management control. 
C) strategic planning. 
D) goal congruence .

Question 18

Senior management of Bina Confections Ltd,a multinational corporation,has taken a polycentric approach to manufacturing,marketing,and distributing its candies. What would be evidence of this perspective?

Accepted Answer

A) explicit policy and procedures manuals for managing foreign operations 
B) high degree of decentralization of decision-making authority 
C) standard product branding and packaging throughout the organization 
D) implementing strategies perfected by managers at the home office 
A) explicit policy and procedures manuals for managing foreign operations 
B) high degree of decentralization of decision-making authority 
C) standard product branding and packaging throughout the organization 
D) implementing strategies perfected by managers at the home office

Question 19

How should multinational corporations reduce the impact of economic exposure?

Accepted Answer

A) hedging foreign currency using a call option 
B) hedging foreign currency using put options 
C) competitive strategic and operational decisions 
D) forward contracts on the foreign currency 
A) hedging foreign currency using a call option 
B) hedging foreign currency using put options 
C) competitive strategic and operational decisions 
D) forward contracts on the foreign currency

Question 20

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 cost center?

Accepted Answer

A) return on investment 
B) EBIT 
C) output volume 
D) residual income 
A) return on investment 
B) EBIT 
C) output volume 
D) residual income

What is cultural proximity?

A company that recognizes and adapts its business practices to differences across cultures in which it operates is referred to as being:

According to surveys in the U.S.and the United Kingdom,what are the most frequently used financial performance measures by multinational organizations?

Which of the following factors is NOT considered in performing the environmental analysis phase of strategy formulation?

How can a multinational enterprise incorporate its perception of high level of risk into its capital budgeting process?

What result can be expected if a management control system encourages managers to focus on inappropriate measures?

Why is depreciation added to net income to determine cash flow from operations?

What term is used to describe a unit of a multinational corporation that takes a leading role in a particular area?

When a unit of a multinational corporation develops knowledge that can be used by other units within the organization,that unit is called a(n):

The process of identifying,evaluating,and selecting projects that require substantial amounts of resources and are expected to generate benefits for many years into the future is called:

The possibility of loss due to unexpected changes in currency values or interest rates is called:

Hyperinflation causes what kind of risk for a multinational corporation?

What is the likely outcome of using performance measures that subsidiary managers perceive to be unachievable?

Which of the following is the role of a performance evaluation system in a multinational corporation?

Which of the following should NOT be included in implementing performance evaluation systems?

Assume that an initial investment is $100,000 and that the estimated annual cash flows for the next 5 years are $18,000. What is the internal rate of return (IRR)for this investment?

Influencing subordinates to behave in accordance with the goals and objectives of the organization is referred to as:

Senior management of Bina Confections Ltd,a multinational corporation,has taken a polycentric approach to manufacturing,marketing,and distributing its candies. What would be evidence of this perspective?

How should multinational corporations reduce the impact of economic exposure?

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 cost center?

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

What is cultural proximity?

A company that recognizes and adapts its business practices to differences across cultures in which it operates is referred to as being:

According to surveys in the U.S.and the United Kingdom,what are the most frequently used financial performance measures by multinational organizations?

Which of the following factors is NOT considered in performing the environmental analysis phase of strategy formulation?

How can a multinational enterprise incorporate its perception of high level of risk into its capital budgeting process?

What result can be expected if a management control system encourages managers to focus on inappropriate measures?

Why is depreciation added to net income to determine cash flow from operations?

What term is used to describe a unit of a multinational corporation that takes a leading role in a particular area?

When a unit of a multinational corporation develops knowledge that can be used by other units within the organization,that unit is called a(n):

The process of identifying,evaluating,and selecting projects that require substantial amounts of resources and are expected to generate benefits for many years into the future is called:

The possibility of loss due to unexpected changes in currency values or interest rates is called:

Hyperinflation causes what kind of risk for a multinational corporation?

What is the likely outcome of using performance measures that subsidiary managers perceive to be unachievable?

Which of the following is the role of a performance evaluation system in a multinational corporation?

Which of the following should NOT be included in implementing performance evaluation systems?

Assume that an initial investment is $100,000 and that the estimated annual cash flows for the next 5 years are $18,000. What is the internal rate of return (IRR)for this investment?

Influencing subordinates to behave in accordance with the goals and objectives of the organization is referred to as:

Senior management of Bina Confections Ltd,a multinational corporation,has taken a polycentric approach to manufacturing,marketing,and distributing its candies. What would be evidence of this perspective?

How should multinational corporations reduce the impact of economic exposure?

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 cost center?

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