Question 1

A tax treaty between two countries is formed to fix the exchange rates between the two countries.

Accepted Answer

A) True 
 B)False  False

Question 2

Explain the three types of decisions in international business.

Accepted Answer

Financial management in an international business includes three sets of related decisions: (1) investment decisions: decisions about what activities to finance, (2) financing decisions: decisions about how to finance those activities, and (3) money management decisions: decisions about how to manage the firm's financial resources most efficiently.

Question 3

The price at which goods and services are transferred between subsidiary companies in a multi-national firm is referred to as minimum retail price.

Accepted Answer

A) True 
 B)False  False

Question 4

The principles of multilateral netting and bilateral netting are different.

Accepted Answer

A) True 
 B)False

Question 5

What are the shortcomings of IASB?

Accepted Answer

To issue a new standard, 75 percent of t

Question 6

What are the criticisms against adjusting discount rates to reflect a location's riskiness?

Accepted Answer

Adjusting discount rates to reflect a lo

Question 7

According to Lessard-Lorange model, _____ 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 8

Which of the following is a country in which banks emerged as the main providers of capital to enterprises?

Accepted Answer

A)  United States 
B)  Britain 
C)  Philippines 
D)  Switzerland 
A)  United States 
B)  Britain 
C)  Philippines 
D)  Switzerland

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 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 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

Multilateral netting is used majorly to _____.

Accepted Answer

A)  reduce the number of transactions between subsidiaries 
B)  avail tax credit from governments 
C)  establish a tax treaty amongst multiple countries 
D)  to reduce the fixed costs of establishing a subsidiary 
A)  reduce the number of transactions between subsidiaries 
B)  avail tax credit from governments 
C)  establish a tax treaty amongst multiple countries 
D)  to reduce the fixed costs of establishing a subsidiary

Question 11

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 12

A tax heaven 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

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 U.S. 
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 U.S.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

The budget is the main instrument of financial control in an organization.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Accounting is shaped by the environment in which it operates.

Accepted Answer

A) True 
 B)False

Question 18

The technical process by which an independent person gathers evidence for determining if financial accounts conform to required accounting standards is known as _____.

Accepted Answer

A)  standardization 
B)  an audit 
C)  reporting 
D)  a benchmark 
A)  standardization 
B)  an audit 
C)  reporting 
D)  a benchmark

Question 19

Lessard and Lorange refer company-generated forecast of future spot rates as _____ rate.

Accepted Answer

A)  forward exchange 
B)  internal forward 
C)  initial exchange 
D)  ending exchange 
A)  forward exchange 
B)  internal forward 
C)  initial exchange 
D)  ending exchange

Question 20

Pooling the cash of all the subsidiaries reduces the earning potential for firms.

Accepted Answer

A) True 
 B)False

A tax treaty between two countries is formed to fix the exchange rates between the two countries.

Explain the three types of decisions in international business.

The price at which goods and services are transferred between subsidiary companies in a multi-national firm is referred to as minimum retail price.

The principles of multilateral netting and bilateral netting are different.

What are the shortcomings of IASB?

What are the criticisms against adjusting discount rates to reflect a location's riskiness?

According to Lessard-Lorange model, _____ is the spot exchange rate forecast for the end of the budget period.

Which of the following is a country in which banks emerged as the main providers of capital to enterprises?

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

Multilateral netting is used majorly 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.

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

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

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

The budget is the main instrument of financial control in an organization.

Firms use fronting loans to _____.

Accounting is shaped by the environment in which it operates.

The technical process by which an independent person gathers evidence for determining if financial accounts conform to required accounting standards is known as _____.

Lessard and Lorange refer company-generated forecast of future spot rates as _____ rate.

Pooling the cash of all the subsidiaries reduces the earning potential for firms.

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of 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, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Filters

Exam 20: Accounting and Finance in the International Business

A tax treaty between two countries is formed to fix the exchange rates between the two countries.

Explain the three types of decisions in international business.

The price at which goods and services are transferred between subsidiary companies in a multi-national firm is referred to as minimum retail price.

The principles of multilateral netting and bilateral netting are different.

What are the shortcomings of IASB?

What are the criticisms against adjusting discount rates to reflect a location's riskiness?

According to Lessard-Lorange model, _____ is the spot exchange rate forecast for the end of the budget period.

Which of the following is a country in which banks emerged as the main providers of capital to enterprises?

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

Multilateral netting is used majorly 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.

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

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

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

The budget is the main instrument of financial control in an organization.

Firms use fronting loans to _____.

Accounting is shaped by the environment in which it operates.

The technical process by which an independent person gathers evidence for determining if financial accounts conform to required accounting standards is known as _____.

Lessard and Lorange refer company-generated forecast of future spot rates as _____ rate.

Pooling the cash of all the subsidiaries reduces the earning potential for firms.

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of 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, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Filters