Question 1

By pooling cash resources centrally firms can _____.

Accepted Answer

A)  better handle short-term cash needs of subsidiaries 
B)  increase liquidity of independent subsidiaries 
C)  reduce the total size of the cash pool it must hold 
D)  avoid government-imposed restrictions on capital flows 
A)  better handle short-term cash needs of subsidiaries 
B)  increase liquidity of independent subsidiaries 
C)  reduce the total size of the cash pool it must hold 
D)  avoid government-imposed restrictions on capital flows

Question 2

Most subsidiaries of an international business operate in uniform environments.

Accepted Answer

A) True 
 B)False

Question 3

Evaluation of a subsidiary should not be separate from the evaluation of its manager.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

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

Question 6

The governments of some countries require or prefer foreign multinationals to finance projects in their country by local debt financing or local sales of equity.

Accepted Answer

A) True 
 B)False

Question 7

Most international businesses require all budgets and performance data within the firm to be expressed in the currencies of the countries where its subunits are located.

Accepted Answer

A) True 
 B)False

Question 8

The ending rate refers to the spot exchange rate forecast for the end of the budget period in the Lessard-Lorange Model.

Accepted Answer

A) True 
 B)False

Question 9

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

What are the nine possible combinations of the three exchange rates proposed by Lessard and Lorange in the control process?

Accepted Answer

These three exchange rates imply nine po

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Identify a key accounting problem that international businesses are confronted with but that does not confront purely domestic businesses.Substantiate with a suitable example.

Accepted Answer

International businesses are confronted

Question 14

When using the projected spot exchange rate to translate both the budget and performance figures into the corporate currency,the projected rate in such cases will typically be the _____.

Accepted Answer

A)  forward exchange rate as determined by the foreign exchange market 
B)  exchange rate that exists at the start of a project 
C)  exchange rate when the budget was prepared 
D)  transfer price that a firm will offer to one or more of its subsidiaries 
A)  forward exchange rate as determined by the foreign exchange market 
B)  exchange rate that exists at the start of a project 
C)  exchange rate when the budget was prepared 
D)  transfer price that a firm will offer to one or more of its subsidiaries

Question 15

_____ 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 16

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 17

A German firm raising capital by selling stock through the London Stock Exchange is an example of _____.

Accepted Answer

A)  transnational financing 
B)  service export 
C)  indirect financing 
D)  transnational investment 
A)  transnational financing 
B)  service export 
C)  indirect financing 
D)  transnational investment

Question 18

What is capital budgeting?

Accepted Answer

Capital budgeting is the technique finan

Question 19

The standards of U.S.Financial Accounting Standards Board and IASB are vastly different.

Accepted Answer

A) True 
 B)False

Question 20

A firm's ability to establish a centralized depository that can serve short-term cash needs might be limited by government-imposed restrictions on capital flows across borders.

Accepted Answer

A) True 
 B)False

By pooling cash resources centrally firms can _____.

Most subsidiaries of an international business operate in uniform environments.

Evaluation of a subsidiary should not be separate from the evaluation of its manager.

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

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

The governments of some countries require or prefer foreign multinationals to finance projects in their country by local debt financing or local sales of equity.

Most international businesses require all budgets and performance data within the firm to be expressed in the currencies of the countries where its subunits are located.

The ending rate refers to the spot exchange rate forecast for the end of the budget period in the Lessard-Lorange Model.

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

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

What are the nine possible combinations of the three exchange rates proposed by Lessard and Lorange in the control process?

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

Identify a key accounting problem that international businesses are confronted with but that does not confront purely domestic businesses.Substantiate with a suitable example.

When using the projected spot exchange rate to translate both the budget and performance figures into the corporate currency,the projected rate in such cases will typically be the _____.

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

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

A German firm raising capital by selling stock through the London Stock Exchange is an example of _____.

What is capital budgeting?

The standards of U.S.Financial Accounting Standards Board and IASB are vastly different.

A firm's ability to establish a centralized depository that can serve short-term cash needs might be limited by government-imposed restrictions on capital flows across borders.

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

By pooling cash resources centrally firms can _____.

Most subsidiaries of an international business operate in uniform environments.

Evaluation of a subsidiary should not be separate from the evaluation of its manager.

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

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

The governments of some countries require or prefer foreign multinationals to finance projects in their country by local debt financing or local sales of equity.

Most international businesses require all budgets and performance data within the firm to be expressed in the currencies of the countries where its subunits are located.

The ending rate refers to the spot exchange rate forecast for the end of the budget period in the Lessard-Lorange Model.

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

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

What are the nine possible combinations of the three exchange rates proposed by Lessard and Lorange in the control process?

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

Identify a key accounting problem that international businesses are confronted with but that does not confront purely domestic businesses.Substantiate with a suitable example.

When using the projected spot exchange rate to translate both the budget and performance figures into the corporate currency,the projected rate in such cases will typically be the _____.

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

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

A German firm raising capital by selling stock through the London Stock Exchange is an example of _____.

What is capital budgeting?

The standards of U.S.Financial Accounting Standards Board and IASB are vastly different.

A firm's ability to establish a centralized depository that can serve short-term cash needs might be limited by government-imposed restrictions on capital flows across borders.

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