What are the different types of industries for which licensing is NOT a good opt
ID: 1210147 • Letter: W
Question
What are the different types of industries for which licensing is NOT a good option?
Under what circumstances, will a firm favor foreign direct investment over exporting as an entry strategy? Provide two examples.
A computer manufacturing firm from the United States invests in a microprocessor manufacturing plant in Taiwan. This is an example of:
a. insourcing.
b. stock consolidation.
c. foreign direct investment.
d. product differentiation.
f. market segmentation
Which of the following is true of the provisions of the North American Free Trade Agreement?
A. It does not allow financial institutions unrestricted access to the Mexican market.
B. It abolishes special treatment (protection) given to Mexican energy and railway industries.
C. It allows lowering of national environmental standards to lure investment.
D. It seeks the removal of most barriers on the cross-border flow of services.
E. It does not deal with the protection of intellectual property rights.
Steven converted $1,000 to ¥105,000 for a trip to Japan. However, he spent only ¥50,000. During this period, the value of the dollar weakened against the yen. Considering a current exchange rate of $1=¥100, how many dollars did Steven spend on the trip?
a.$500 b. $450 c. $553 d.$600 e. $550
Explanation / Answer
1)
Different type of industry where licensing is not good are:
2)
Below are the circumstances where the firm will favour FDI over exporting
3)
Option C
This is an example of FDI as computer manufacturing firm is directly investing in microprocessor plant in different country (Taiwan).FDI is an investment made by a firm of a country to a different country
4)
Option D
It seeks the removal of most barriers on the cross border flow of services. As the NAFTA was establish to remove the barriers to trade and investment in the US, Canada and Mexico and implemented on 1-Jan-1994
5)
Total Yen Spend=50000
Total Yen remaining=105000-50000=55000
Value of Remaining Yen in dollar=55000/100=550
Thus Dollar spend in the trip =Initial dollar –Final dollar remaining=1000-550=$450
Hence Option B
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