1) Which of the following describe typical multinational enterprises? Check all
ID: 1165639 • Letter: 1
Question
1) Which of the following describe typical multinational enterprises? Check all that apply.
-Firms operating in more than one country
-Firms with stock ownership and management, which is multinational in character
-Manufacturing firms that conduct research and development
-Firms with unusually high rates of return on capital investment
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2) Which of the following factors may influence a business's decision to enter foreign markets by extending licenses or franchises to local businesses to produce its goods? Check all that apply.
-The amount of capital used in the production process
-The percentage of males in the workforce
-Supply conditions
-Comparative labor productivities and wage levels
Explanation / Answer
Q1) Answer: 1st, 3rd, and 4th.
As the name suggests a multinational has operation at least in a country other than the home country. It usually does operation through improved technology, which they get through research and development process. Since such firms are financially capable and have high economics of scale, they enjoy unusual returns.
Q2) Answer: 1st, 3rd, and 4th.
Capital investment is the key for such business decision; it indicates financial capability. Production of goods in a foreign country requires availability of raw materials and its supply in that country; this has to be monitored before the decision. Production runs by labors; therefore, their wage rates and productivity should be compared with the home country for proper evaluation.
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