EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 1, Problem 11PROB
Summary Introduction
To determine: factors that make financial decision-making more difficult for firms that operate in foreign markets
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How is multinational financial management different from financial management as practicedby a firm that has no direct contacts with foreignfirms or customers? What special problems andchallenges do multinational firms face? Whatfactors cause companies to “go multinational”?
Multinational management commonly do NOT fully understand:
a.
institutions, history and culture.
b.
the risk of foreign exchange.
c.
country and political risks.
d.
financial mechanism.
How is international financial management different from domestic financial management?
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- One of the ways to analyze a company’s financial performance is to compare its performance with those of Multiple Choice foreign governments. manufacturers producing their products. its competitors. the U.S. government.arrow_forwardDoes a large, international accounting firm seem appealing to you? What is the primary attraction of such firms? What's the major downside?arrow_forward1. What impact would harmonization of national accounting standards have on international businesses? 2. Are U.S. firms at a competitive disadvantage because they cannot use accounting reserves as German firms do?arrow_forward
- As for the outsourcing of multinational companies, please talk about the language and cultural differences, as well as the political risks that complicate the financial management of multinational companies.arrow_forwardHow does accounting theory address the challenges and complexities of multinational corporations, including issues related to currency translation, transfer pricing, and global financial reporting standards?arrow_forward. What is globalization? What modes of international business are used by firms that want to globalize? Briefly describe each method. 1. What is the difference between a monochronic and a polychronic culture? How do such cultural differences affect business practices for international firms? 2. What is gross national income? How is it calculated? Illustrate your answer with a specific example. 1. What are the disadvantages of import restrictions in regard to creating domestic employment opportunities? 2. What is value chain configuration? Briefly list and discuss the factors that influence value chain configuration. 1. What is the relationship between a company's international market and its production location decisions? How do firms benefit from the use of scanning techniques when making location decisions? 2. Explain how franchising agreements differ from licensing agreements. 1. Compare push and pull promotional strategies in the context of international business.…arrow_forward
- Are traditional international business theories, such as the Uppsala model, still applicable to explaining the internationalisation behaviour of emerging country multinational companies? Discuss.arrow_forwardWhat is the difference between technology risk and operational risk? How does internationalizing the payments system among banks increase operational riskarrow_forwardEntry modes for entering new countries vary in their degree of control. What does control mean? O The degree of risk a firm has in its foreign activities The degree of ownership a firm has in its foreign activities O The degree of profits a firm has in its foreign activities O The degree of influence a firm has in its foreign activitiesarrow_forward
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