Why might an accounting -based control system provide headquarters management with biased information about performance in a foreign subsidiary?
How can these biases best be corrected?
1. Which of the following is the technique that financial managers use to try to quantify the benefits, costs, and risks of an investment?
Transfer pricing
Internal audit
Capital budgeting
2. Personal accountiA loan between a parent and its subsidiary channeled through a financial intermediary, usually a large international bank.
Direct intrafirm loan
Fronting loan
Indirect intrafirm loan
Backing loanng
3. _____ is the technique financial managers use to try to quantify the benefits, costs, and risks of an investment.
Project cash flow
Capital tracking
4.. A loan between a parent and its subsidiary channeled through a financial intermediary, usually a large international bank.
Direct intrafirm loan
Fronting loan
Indirect intrafirm loan
Backing loan
Parent cash flow
Capital budgeting
5. The _____ writes the generally accepted accounting principles by which the financial statements of U.S. firms must be prepared.
U.S. Securities and Exchange Commission
Office of Economic Analysis
Financial Accounting Standards Board
International Accounting Standards Board
6.Using multilateral netting in international businesses helps firms
avail tax credit from governments.
reduce the transaction costs.
establish a tax heaven within its network.
reduce the fixed costs of establishing a subsidiary.
7. A firm may wish to consider _____ for investments in countries where the local currency is expected to depreciate on the foreign exchange market.
local debt financing
the domestic capital market
foreign sales of liquidity
Eurobond market
8. A person based in Japan buys the shares of General Motors through the New York Stock Exchange. This is an example of _____.
transnational investment
service export
service import
transnational financing