1. Should tax-related factors be considered in evaluating a foreign target?
Yes, different tax rates may increase after-tax earnings
No, corporate tax rates in the home country and the foreign country are the same
No, foreign taxes can be deducted from home country taxes
Yes, corporate tax rates in the home country are always higher
None of the above
2. Counter purchase:
Is a form of barter
Involves two separate transactions
Always involves governments and MNCs
Is not a form of counter trade
None of the above
3. MNCs sometimes measure country risk by assigning weights to factors. Which of the following is correct?
Weights should be equally allocated among factors
Factors will be identical for all MNCs conducting business in the same country
Factors for political and financial risk will be equally weighed in the final analysis
Weights should be assigned to factors for political and financial risk according to their perceived importance.
None of the above
4. The Export-Import Bank of the U.S. offers various programs, including:
Medium-term guarantee program
Bank insurance programs for exporters
Export credit insurance program for exporters
Working capital guarantee program
All of the above
5. U.S. MNC is considering investing in Portuguese securities. The exchange rate is € = $1.33. If the euro depreciates, the effective yield on the investment will be:
Higher, because the euro will convert to fewer dollars
Lower, because the euro will convert to fewer dollars
Higher, because the dollar will convert to fewer euros
Lower, because the dollar will convert to more euros
Lower, because the dollar will convert to more euros
6. Spain and South Africa have very different economic conditions. A MNC would reduce risk by:
Operating in both countries
Operating in Spain, but not South Africa
Operating in South Africa, but not Spain
Operating in neither country
None of the above
With consignments:
7. The exporter ships the goods to the importer along with the title to the goods
The importer pays the exporter as soon as the goods are received
The importer pays the exporter when the goods are sold
The exporter and importer assume equal risk
None of the above.