khakaan

Nov 24th, 2013
HelloWorld
Category:
Business & Finance
Price: $50 USD

Question description


Question 1






  1.  

    International governance is achieved by all of
    the following except:

    Answer



    poison
    pills.




    board of
    directors.




    institutional
    investors.




    blockholders.



1 points  


Question 2






  1.  

    Which of the following types of international
    corporate control transaction is probably the most difficult to value by an
    MNC?

    Answer



    international
    acquisition.




    newly privatized foreign
    business.




    international
    alliance.




    international
    divestiture.


1 points  


Question 3






  1.  

    When an MNC assesses targets among countries,
    it would prefer a country where the growth potential for its industry is ____
    and the competition within the industry is ____.

    Answer



    low; not
    excessive




    high;
    excessive




    high; not
    excessive




    low;
    excessive


1 points  


Question 4






  1.  

    Other things being equal, a foreign subsidiary
    in China would more likely be divested by the U.S. parent if new information
    caused the parent to suddenly anticipate that:

    Answer



    the Chinese yuan would depreciate
    in the future.




    the Chinese yuan would appreciate
    in the future.




    the Chinese yuan would remain
    somewhat stable in the future.




    none of the above; the value of the
    Chinese yuan has no impact on the feasibility of a
    divestiture.


1 points  


Question 5






  1.  

    If an MNC targets a successful foreign company
    with plans to continue the target's local business in a more efficient manner,
    the risk of the business will be relatively ____, and therefore the MNC's
    required return from acquiring the target will be relatively
    ____.

    Answer



    high; high




    high; low




    low; high




    low;
    low


1 points  


Question 6






  1.  

    Firms based in ____ tend to acquire more U.S.
    target firms than the other countries listed here.

    Answer



    Canada




    Japan




    Germany




    Mexico



1 points  


Question 7






  1.  

    Which of the following tax-related factors
    need not be considered in assessing a foreign target?

    Answer



    corporate tax rates in the host
    country.




    withholding tax rates in the host
    country.




    withholding tax rates in the home
    country.




    corporate tax rates in the home
    country.


1 points  


Question 8






  1.  

    According to your text, U.S. firms pursue more
    international acquisitions in ____ than in other
    countries.

    Answer



    the U.K.




    Mexico




    Japan




    Germany




    France



1 points  


Question 9






  1.  

    An international alliance typically requires a
    ____ initial outlay than an international acquisition, and the cash flows to be
    received will typically be ____ than the cash flow resulting from an
    international acquisition.

    Answer



    smaller;
    larger




    smaller;
    smaller




    larger;
    smaller




    larger;
    larger


1 points  


Question 10






  1.  

    Based on information in your text, all of the
    following factors should be considered in an international acquisition,
    except:

    Answer



    the target's willingness to be
    acquired.




    the target's previous acquisition
    history.




    the target's previous cash
    flows.




    the target's local economic
    conditions.


1 points  


Question 11






  1.  

    If the foreign currency ____ by the time the
    acquirer makes payment, the acquisition will be more costly, and the cost of the
    acquisition changes ____ the change in the exchange
    rate.

    Answer



    appreciates; by a lesser percentage
    then




    depreciates; in the same proportion
    as




    appreciates; in the same proportion
    as




    appreciates; by a greater
    percentage than


1 points  


Question 12






  1.  

    Which of the following factors is least likely
    to cause the required rate of return to vary among MNCs assessing the same
    foreign target?

    Answer



    differences in the timing of
    remittances from the target to the parent.




    differences in the desired use of
    the target.




    differences in the local risk-free
    interest rate.




    differences in the ability to use
    financial leverage.


1 points  


Question 13






  1.  

    Potential targets in countries where economic
    conditions are ____ are more likely to experience strong demand for their
    products in the future and may generate ____ cash
    flows.

    Answer



    strong;
    lower




    weak;
    higher




    weak; lower




    strong;
    higher


1 points  


Question 14






  1.  

    The valuation of a newly privatized business
    is generally more difficult than the valuation of a publicly traded firm
    because:

    Answer



    It has previously operated in
    environments of very high competition.




    Interest rates in the countries
    where privatization takes place are extremely high.




    The stock markets in the countries
    where privatization takes place are overvalued.




    Economic conditions in the
    countries where privatization takes place are very
    uncertain.


1 points  


Question 15






  1.  

    According to your text, all of the following
    are factors to be considered in an international acquisition,
    except

    Answer



    the target's willingness to be
    acquired.




    the target's previous acquisition
    history.




    the target's previous cash
    flows.




    the target's local economic
    conditions.


1 points  


Question 16






  1.  

    To best reduce exposure to a host government
    takeover, a subsidiary could:

    Answer



    use a long-run profit perspective
    for business in that country.




    hire people from its own country
    (where the parent is located).




    attempt to obtain supplies from its
    parent for which substitutes are not available.




    borrow funds from its parent rather
    than from the host country's
    creditors.


1 points  


Question 17






  1.  

    An MNC considers direct foreign investment in
    Germany. It is mainly concerned with the subsidiary's ability to generate
    sufficient sales there. The country risk characteristic that would best address
    this concern is:

    Answer



    the host government's tax rates
    charged on remitted earnings.




    the possibility of blocked
    funds.




    the state of the economy in
    Germany.




    the possibility of a withholding
    tax imposed by the German
    government.


1 points  


Question 18






  1.  

    When quantifying country
    risk:

    Answer



    weights should be equally allocated
    among factors.




    weights should be assigned to the
    political and financial factors according to their perceived
    importance.




    it is not generally necessary to
    construct separate ratings for political and financial risk since these will be
    equally weighed in the final analysis.




    the derived factors will be
    identical for all MNCs conducting business in that
    country.


1 points  


Question 19






  1.  

    ____ is (are) not a form of political
    risk.

    Answer



    Exchange rate
    movements




    Attitude of consumers in the host
    country




    Actions of the host
    government




    Blockage of fund
    transfers


1 points  


Question 20






  1.  

    The ____ involves the collection of
    independent opinions on country risk without group discussion by the assessors
    who provide these opinions.

    Answer



    checklist
    approach




    discriminant
    analysis




    regression
    analysis




    Delphi
    technique


1 points  


Question 21






  1.  

    An MNC has a foreign manufacturing plant to
    capitalize on cheap production costs; the MNC exports all the goods produced. It
    should be most concerned about the country's:

    Answer



    growth in gross domestic
    product.




    government policies designed to
    increase tariffs on imported goods.




    local consumer purchasing
    habits.




    government environmental
    regulations and taxes on the lease or purchase of a production
    site.


1 points  


Question 22






  1.  

    If a foreign country's consumers tend to only
    purchase products that are produced locally, the least effective strategy for a
    U.S. firm is to:

    Answer



    use a licensing arrangement with a
    local firm in that country.




    enter into a joint venture in that
    country.




    develop a subsidiary (under the
    U.S. name) that manufactures and sells products in that
    country.




    develop a subsidiary (under the
    U.S. name) that manufactures products in that country and exports them to border
    countries.


1 points  


Question 23






  1.  

    ____ is not a political risk
    factor.

    Answer



    High interest rates in a foreign
    country




    Currency
    inconvertibility




    War




    Corruption



1 points  


Question 24






  1.  

    A ____ currency may ____ the volume of
    products imported by the country and therefore reduce the country's production
    and national income.

    Answer



    weak;
    increase




    weak;
    reduce




    strong;
    increase




    strong;
    reduce


1 points  


Question 25






  1.  

    When determining whether a particular
    proposed project in a foreign country is feasible:

    Answer



    a country risk rating can
    adequately substitute for a capital budgeting analysis.




    country risk analysis should be
    incorporated within the capital budgeting analysis.




    the effect of country risk on
    sales revenue is more important than the effect on cash
    flows.




    the project with the highest
    country risk rating (lowest country risk) should be
    accepted.


1 points  


Question 26






  1.  

    Which of the following is not a way in which
    country risk analysis can be used?

    Answer



    to monitor countries where an MNC
    is currently doing business.




    as a screening device to avoid
    conducting business in countries with excessive risk.




    to revise an MNC's financing
    decisions.




    to determine the degree to which
    the MNC is exposed to exchange rate
    movements.


1 points  


Question 27






  1.  

    Which of the following is not a technique to
    assess country risk?

    Answer



    Gamma
    technique.




    Delphi
    technique.




    checklist
    approach.




    inspection
    visits.


1 points  


Question 28






  1.  

    When the war in Iraq began in 2003, some MNCs
    feared that oil prices would ____ and that U.S. inflation and interest rates
    would ____.

    Answer



    rise; rise




    fall; fall




    rise; fall




    fall;
    rise


1 points  


Question 29






  1.  

    According to the text, the most appropriate
    method of incorporating country risk into capital budgeting analysis is
    to:

    Answer



    compare each form of a country
    risk rating to a benchmark level.




    estimate the effect of each form
    of country risk on cash flows.




    estimate the effect of each form
    of country risk on the income statement and balance
    sheet.




    adjust the discount rate to
    reflect the level of country risk using the conventional adjustment formula that
    is used by virtually all
    MNCs.


1 points  


Question 30






  1.  

    The checklist
    approach:

    Answer



    requires several inspections of
    the country being evaluated.




    requires the use of discriminant
    analysis to assess country risk.




    requires ratings and weights to be
    assigned to all factors relevant in assessing country
    risk.




    involves the collection of
    independent opinions on country risk.


Tutor Answer

(Top Tutor) Daniel C.
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School: Rice University
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