1. Multinational corporations Why do companies go global? Multinational corporations operate in locations across the world. Each company has its own motive for its presence in different countries. Consider the following case: RTE Telecom Inc. is located in Germany, a high-cost country, and its managers have decided to shift some of its production facilities to Indonesia, a low-cost country, in an attempt to lower production costs. Which of the following best describes the reason RTE Telecom Inc. has decided to go global? To seek production efficiency To avoid political, trade, and regulatory hurdles To broaden its markets Now consider the case of Blue Box Crate Company. To conceal its trade secrets, Blue Box Crate Company has decided to invest abroad instead of licensing to local forelgn firms. Blue Box Crate Company has decided to go global in order to Companies go global for various reasons. Although becoming a multinational corporation provides prospects for high returns and diversification, it makes financial management more complicated for financial executives and managers. Based on your understanding of the factors that complicate financial management in multinational firms, complete the following statement: Compared to domestic corporations, multinational corporations have risk from exchange rate fluctuations. Grade it Now Save & Continue Continue without saving 1. Multinational corporations Why do companies go global? Multinational corporations operate in locations across the world. Each company has its own motive for its presence in different countries. Consider the following case: RTE Telecom Inc. is located in Germany, a high-cost country, and its managers have decided to shift some of its production facilities to Indonesia, a low-cost country, in an attempt to lower production costs. Which of the following best describes the reason RTE Telecom Inc. has decided to go global? To seek production efficiency To avoid political, trade, and regulatory hurdles To broaden its markets Now consider the case of Blue Box Crate Company. To conceal its trade secrets, Blue Box Crate Company has decided to invest abroad instead of licensing to local forelgn firms. Blue Box Crate Company has decided to go global in order to Companies go global for various reasons. Although becoming a multinational corporation provides prospects for high returns and diversification, it makes financial management more complicated for financial executives and managers. Based on your understanding of the factors that complicate financial management in multinational firms, complete the following statement: Compared to domestic corporations, multinational corporations have risk from exchange rate fluctuations. Grade it Now Save & Continue Continue without saving
