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International Business Test - 19

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International Business Test - 19
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  • Question 1
    1 / -0
    A joint venture means establishing a firm that is jointly owned by ______________.
    Solution
    A joint venture  is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity.
  • Question 2
    1 / -0
    The parent company acquires full control over the foreign company by making 100 per cent investment in __________.
    Solution
    • When a company makes a full investment of equity share capital of a company, the company is owned by the investor.
    • The parent company acquires full control over the foreign company by making 100 per cent investment in equity capital. 
  • Question 3
    1 / -0
    How many ways are there to establish a joint venture?
    Solution
    There are three ways to establish a joint venture. The equity joint venture, the contractual joint venture, licensing agreement.
  • Question 4
    1 / -0
    Companies which want to exercise full control over their overseas operations prefer ______ more to enter International business.
    Solution
    • This entry mode of international business is preferred by companies which want to exercise full control over their overseas operations.
    • The parent company acquires full control over the foreign company by making 100 per cent investment in its equity capital
    • A wholly owned subsidiary in a foreign market can be established in either of the two ways:
    (i) Setting up a new firm altogether to start operations in a foreign country — also referred to as a green field venture, or
    (ii) Acquiring an established firm in the foreign country and using that firm to manufacture and/or promote its products in the host nation.

  • Question 5
    1 / -0
    Joint venture is a common strategy to enter into a/an ____________.
    Solution
    Joint venture is a common strategy to enter into a foreign market as the domestic company jointly ventures into the foreign market with a domestic company of that region with the required resources and finances.
  • Question 6
    1 / -0
    The __________ is able to exercise full control over its operations in foreign countries.
    Solution
    The parent firm is able to exercise full control over its operations in foreign countries as the parent firm invests 100% equity capital into its foreign operating firms.
  • Question 7
    1 / -0
    The refund of excise duties paid on the export goods is known as ________.
    Solution
    Duty drawback compensates or refunds exporters for the duties paid on inputs used to manufacture, the excise duties paid for the export of the products.
  • Question 8
    1 / -0
    Payment of _________ on a regular basis is to be made to the franchiser.
    Solution
    The payment of royalty is the payment made by the franchisee to the franchiser on a regular basis for him to let the franchisee run a business with his established goodwill, trademark, and processes.
    Hence, option (B) is the correct answer.
  • Question 9
    1 / -0
    Franchising enables the franchiser to increase his goodwill and reputation by expanding his network.
    Solution
    franchise is a business opportunity that allows the franchisee to start a business by legally using the franchiser's expertise, ideas, and processes. This helps the franchiser to grow his business in the market and increases the goodwill of the franchiser.
    Hence, option (C) is the correct answer.
  • Question 10
    1 / -0
    The ________ arrangement  may lead to conflicts, resulting in battle for control between the investing firms.
    Solution
    The dual ownership arrangement  may lead to conflicts, resulting in battle for control between the investing firms as both the firms are focused on the completion of their own objectives, less coordination between firms may lead to conflicts. 
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