Question 1

Using the ending rate to translate the budget is a valid practice according to the Lessard-Lorange Model.

Accepted Answer

A) True 
 B)False

Question 2

Money management decisions attempt to manage the firm's _____ most efficiently.

Accepted Answer

A)  cash flow 
B)  corporate expenses 
C)  working capital 
D)  corporate revenues 
A)  cash flow 
B)  corporate expenses 
C)  working capital 
D)  corporate revenues

Question 3

Every time a firm changes cash from one currency into another currency it must bear a(n) _____.

Accepted Answer

A)  transaction cost 
B)  tax 
C)  transfer fee 
D)  audit 
A)  transaction cost 
B)  tax 
C)  transfer fee 
D)  audit

Question 4

Auditing standards are rules that define the accounting principles and monetary policy of a nation.

Accepted Answer

A) True 
 B)False

Question 5

_____ costs are incurred every time a firm changes cash from one currency into another currency.

Accepted Answer

A)  Dividend 
B)  Capital 
C)  Fixed 
D)  Transaction 
A)  Dividend 
B)  Capital 
C)  Fixed 
D)  Transaction

Question 6

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 United States are widely regarded as tax havens. 
D)  Firms can save tax by establishing a non-operating 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 United States are widely regarded as tax havens. 
D)  Firms can save tax by establishing a non-operating subsidiary in the tax haven.

Question 7

Describe the three exchange rates that Lessard and Lorange pointed out.

Accepted Answer

Lessard and Lorange pointed out three ex

Question 8

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 9

A fee is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

Accepted Answer

A) True 
 B)False

Question 10

The total size of a firm's cash pool increases when it pools cash reserves of subsidiaries.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following combinations of exchange rates was recommended for translating budget and performance by Lessard and Lorange?

Accepted Answer

A)  Translating budget using projected rate and translating actual performance using initial rate 
B)  Translating both actual performance and budget using initial rate 
C)  Translating budget using ending rate and translating actual performance using initial rate 
D)  Translating both actual performance and budget using projected rate 
A)  Translating budget using projected rate and translating actual performance using initial rate 
B)  Translating both actual performance and budget using initial rate 
C)  Translating budget using ending rate and translating actual performance using initial rate 
D)  Translating both actual performance and budget using projected rate

Question 12

Which of the following 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 13

A deferral principle specifies that parent companies are not taxed on foreign source income until:

Accepted Answer

A)  the subsidiary providing income makes some profit. 
B)  they actually receive a dividend. 
C)  they acquire majority stake in the subsidiary. 
D)  the subsidiary providing income is listed in the United States. 
A)  the subsidiary providing income makes some profit. 
B)  they actually receive a dividend. 
C)  they acquire majority stake in the subsidiary. 
D)  the subsidiary providing income is listed in the United States.

Question 14

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 15

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 16

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 17

_____ 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 18

_____ is the most common method by which firms transfer funds from foreign subsidiaries to the parent company.

Accepted Answer

A)  Issue of long-term loans 
B)  Payment of annual fee 
C)  Issue of bonds 
D)  Payment of dividends 
A)  Issue of long-term loans 
B)  Payment of annual fee 
C)  Issue of bonds 
D)  Payment of dividends

Question 19

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 20

A _____ is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

Accepted Answer

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

Using the ending rate to translate the budget is a valid practice according to the Lessard-Lorange Model.

Money management decisions attempt to manage the firm's _____ most efficiently.

Every time a firm changes cash from one currency into another currency it must bear a(n) _____.

Auditing standards are rules that define the accounting principles and monetary policy of a nation.

_____ costs are incurred every time a firm changes cash from one currency into another currency.

Which of the following statements is true of tax havens?

Describe the three exchange rates that Lessard and Lorange pointed out.

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

A fee is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

The total size of a firm's cash pool increases when it pools cash reserves of subsidiaries.

Which of the following combinations of exchange rates was recommended for translating budget and performance by Lessard and Lorange?

Which of the following is an accounting problem that only international businesses face?

A deferral principle specifies that parent companies are not taxed on foreign source income until:

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

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.

The age of a foreign subsidiary:

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

_____ is the most common method by which firms transfer funds from foreign subsidiaries to the parent company.

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.

A _____ is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Filters

Exam 20: Accounting and Finance in the International Business

Using the ending rate to translate the budget is a valid practice according to the Lessard-Lorange Model.

Money management decisions attempt to manage the firm's _____ most efficiently.

Every time a firm changes cash from one currency into another currency it must bear a(n) _____.

Auditing standards are rules that define the accounting principles and monetary policy of a nation.

_____ costs are incurred every time a firm changes cash from one currency into another currency.

Which of the following statements is true of tax havens?

Describe the three exchange rates that Lessard and Lorange pointed out.

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

A fee is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

The total size of a firm's cash pool increases when it pools cash reserves of subsidiaries.

Which of the following combinations of exchange rates was recommended for translating budget and performance by Lessard and Lorange?

Which of the following is an accounting problem that only international businesses face?

A deferral principle specifies that parent companies are not taxed on foreign source income until:

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

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.

The age of a foreign subsidiary:

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

_____ is the most common method by which firms transfer funds from foreign subsidiaries to the parent company.

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.

A _____ is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Filters