In a foreign market analysis, indirect cost include costs associated with setting up a business operation, transferring managers to run it, and shipping equipment, and merchandise.

TRUE

FALSE

Theft of intellectual property (IP) by one or more partners is a valid reason to terminate the partnership.

TRUE

FALSE

A licensor is one who grants the right to produce and sell goods, apply a brand name or trademark, or use patented technology owned by the licensor.

TRUE

FALSE

A strategic alliance is an agreement between two or more parties stating that the involved parties will act in a certain way in order to achieve a common goal.

TRUE

FALSE

FDI is the mode of entry that carries the highest risk and the highest potential return.

TRUE

FALSE

Based on our lecture on strategic planning for market entry, we defined contract manufacturing as a market entry method where a local company outsources some of the work to a foreign company.

TRUE

FALSE

One of the main benefits of inward FDI for a host country is the balance of payment effect.

TRUE

FALSE

The purpose of the exit strategy could be to limit losses or when a business venture has met its profit objective

TRUE

FALSE

The majority of cross-border investment involves mergers and acquisitions rather than greenfield investments.

TRUE

FALSE

One of the reasons why companies prefer FDI over Exportation is because of the high cost of transportation may make exporting unprofitable.

TRUE

FALSE

The internet or any other online marketing platforms are not important factors for the investing business to consider entering a foreign market.

TRUE

FALSE

In a dispute resolution, the result of arbitration is NOT enforceable by a court and the parties are NOT bounded by the arbitration.

TRUE

FALSE

An ethical issue involving the management and governance of a foreign distributor can be reasons for exiting the market.

TRUE

FALSE

A change of ownership in one or more partners in a partnership is not a ground for ending a partnership.

TRUE

FALSE

Horizontal FDI is where an investment is made within the supply chain, but not directly in the same industry.

TRUE

FALSE

Exit strategy is a contingency plan that is executed by business partners to liquidate a position in a financial asset or dispose of tangible business assets once predetermined criteria for either has been met or exceeded.

TRUE

FALSE

Clear selection

The flow of FDI refers to the amount of FDI undertaken over a given time period. Inflows of FDI are the flows of FDI out of a country.

TRUE

FALSE

Conglomerate FDI is where an investment is made in a completely different industry. In other words, it is not linked in any direct way to the investors business

TRUE

FALSE

Foreign direct investment (FDI) occurs when a firm invests directly in new facilities to produce and/or market in a foreign country and once that firm undertakes FDI it becomes a multinational enterprise.

TRUE

FALSE

Firms prefer to acquire existing assets because mergers and acquisitions are quicker to execute than greenfield investments and firms believe they can increase the efficiency of an acquired unit by transferring capital, technology, or management skills.

TRUE

FALSE

When the company is purchased by another company or the company's share of a joint venture is purchased it is called a buyout.

TRUE

FALSE

Entry modes may be classified by their risk/reward profile. In this context hierarchical modes represent a sharing of the risks and rewards between two or more firms.

TRUE

FALSE

The franchisee is the entity or person owning the rights of the business, that garnet to other people to manufacture or distribute his products.

TRUE

FALSE

An ethical issue involving the management of a foreign distributorship can be reasons for exiting the market.

TRUE

FALSE

Maxwell Steels of Canada, which manufactures barrels for guns, has partnered with Sig Sauer Company Germany, which manufactures different types of guns. After a year, a devastating tornado totally destroyed the manufacturing plant of Maxwell Steels. It would take 6 months to rebuilt and have the plant online. Sig Sauer Company has the legal right to move for the termination of the partnership on the grounds of 'an act of God".

TRUE

FALSE

Selling the license or disposing of the business unit are examples of exit strategies.

TRUE

FALSE

In a dispute resolution, the results of a mediation is non-binding and the parties are not bound by any decisions made by the mediator.

TRUE

FALSE

Reorganization, as an exit strategy, is when the company ceases operations or the partnership is dissolved.

TRUE

FALSE

Loss of freedom, loss of control, loss of profits and the potential for damaged reputation are a few of the advantages of strategic alliances.

TRUE

FALSE

One of the advantages of e-commerce are that the businesses are not subject to legislation in the country of origin and in the countries where the customers live.

TRUE

FALSE