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Test Bank for International Financial Management, 14th Edition by Jeff Madura $29.99   Add to cart
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Test Bank for International Financial Management, 14th Edition by Jeff Madura
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Test Bank for International Financial Management 14e 14th Edition by Jeff Madura. ISBN-13: 0544 Full Chapters test bank included Part 1: The International Financial Environment Chapter 1: Multinational Financial Management: An Overview 1-1 Managing the MNC 1-2 Why MNCs Pursue Internation...

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  • December 11, 2022
  • 331
  • 2022/2023
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Name: Class: Date:

Chap 01_14e

Indicate whether the statement is true or false.
1. The parent of an MNC can implement compensation plans that directly reward the subsidiary managers for
enhancing the value of the MNC.
a. True
b. False

2. MNCs commonly consider establishing a new foreign subsidiary to replace their exporting business because it
allows them to avoid exchange rate risk.
a. True
b. False

3. Franchising is the process by which national governments sell state-owned operations to corporations and other
investors.
a. True
b. False

4. If managers of foreign subsidiaries make decisions that maximize the values of their respective subsidiaries, they
automatically maximize the value of the entire corporation.
a. True
b. False

5. A decentralized management style results in relatively high agency costs for an MNC.
a. True
b. False

6. The imperfect markets theory states that factors of production are somewhat immobile, allowing firms to
capitalize on a foreign country's resources.
a. True
b. False

7. The valuation of an MNC accounts for all the cash flows received by the foreign subsidiaries plus all the cash
flows remitted by the subsidiaries.
a. True
b. False

8. A microeconomic perspective focuses on external forces such as economic conditions that can affect the value
of an MNC.
a. True
b. False

9. One form of exposure to political risk is terrorism.
a. True
b. False




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