ch01 - Shapiro6thTESTBANK Chapter 1 CHAPTER 1 Introduction...

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Shapiro6thTESTBANK Chapter 1 CHAPTER 1 Introduction EASY 1.1 Historically, the primary motive for U.S. multinationals to produce abroad has been to a. lower costs b. respond more quickly to the marketplace c. avoid trade barriers d. gain tax benefits ANSWER: b: evolution of multinational 1.2 The primary objective of the multinational corporation is to a. maximize shareholder wealth b. maximize world production c. minimize debt d. minimize the cost of doing business globally ANSWER: a: Multinational Financial Management: Theory and Practice 1.3 ____________ is defined as the purchase of assets or commodities on one market for immediate resale on another in order to profit form a price discrepancy. a. internationalization b. arbitrage c. financing d. total risk ANSWER: b: evolution of multinational 1.4 The value of good financial management is ___________ in the global markets because of the much greater probability of market imperfections and multiple tax rates. a. minimized b. neutralized c. enhanced d. arbitraged away ANSWER: c: role of the financial executive 1.5 When a firm operates globally it offers advantages such as a. greater political power at home b. less taxes on its profits c. greater negotiating power with foreign minority groups d. greater negotiating power with labor unions ANSWER: d: rise of the multinational
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Shapiro6thTESTBANK Chapter 1 1.6 The prime transmitter of global competitive forces is the a. public utility firm b. financial management experience of the U.S. markets c. the multinational corporation d. the Federal Reserve System of the U.S. ANSWER: c: rise of the multinational 1.7 ___________ were the earliest multinationals. a. raw-material seekers b. market seekers c. cost minimizers d. oil companies. ANSWER: a: raw material seekers 1.8 The ___________ are the archetype of the modern multinational firm that goes overseas to produce and sell in foreign markets. a. cost minimizers b. market seekers c. raw-material seekers d. whaling companies ANSWER: b: market seekers 1.9 ___________ are a recent category of multinationals that seek out and invest in lower cost production sites overseas.
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