W3P1 (article): Multinational Corporation by Corporate Finance Institute (CFI) Flashcards
Which of the following is not a motivation for why companies want to become multinational corporations?
a) Access to a larger talent pool
b) Gaining access to lower production costs
c) Proximity to target international markets
d) Higher tariffs and quotas
D
Which of the following correctly states the three models of multinational corporations?
a) Centralized, Multinational, International
b) Centralized, Global, Multinational
c) Transnational, Regional, Global
d) Centralized, Regional, Multinational
D
Which of the following MCN models is characterized by a company having an executive headquarter that directly manages the offices and facilities in other countries?
a) Centralized Model
b) Regional Model
c) International Model
d) Multinational Model
A
Which of the following is an advantage of becoming a multinational corporation?
a) Facing fewer legal complexity across countries
b) Increased tax compliance
c) Access to cheaper labour and raw materials
d) Limited access to global markets
C
Which of the following is not a drawback of becoming a multinational?
a) Increased tax compliance in new jurisdictions
b) Access to new markets and resources
c) Political instability
d) Increased legal burden
B
Which of the following is the best definition of foreign direct investment (FDI)?
a) Investing in a foreign business to gain direct control or influence on operations
b) Purchasing international portfolio to gain equity
c) Selling goods or services to another country
d) Exporting goods and services from one country to another
A
What is a defining characteristic of a multinational corporation (MNC)?
a) It only exports products to other countries.
b) It has actual business operations and makes foreign direct investments in multiple countries.
c) It only sells products online.
d) It operates solely within its home country.
B
Which of the following is NOT a reason for a company to become a multinational corporation?
a) Access to lower production costs
b) Proximity to target international markets
c) Avoidance of all legal responsibilities
d) Access to a larger talent pool
C
In which model do subsidiaries and affiliates operate with more independence?
a) Centralized Model
b) Regional Model
c) Multinational Model
d) Cooperative Model
C
What is one disadvantage of being a multinational corporation?
a) They always operate in stable countries.
b) They face increased legal complexity.
c) They have no competition.
d) They are not taxed in foreign countries.
B
What is one disadvantage of being a multinational corporation?
a) They always operate in stable countries.
b) They face increased legal complexity.
c) They have no competition.
d) They are not taxed in foreign countries.
C
What can lead to negative public relations for an MNC?
a) Hiring local workers
b) Providing better wages than local companies
c) Contributing to local economies
d) Being accused of job outsourcing
D
Which of the following is NOT an advantage of being a Multinational Corporation?
a) Employment
b) Innovation
c) Public relations
d) Efficiency
C
A regional multinational corporation is which of the following:
a) The parent company works in the home country and puts up subsidiaries in various countries
b) Has the headquarters in one country while supervising offices in other countries
c) Has only a parent company and no connections with other countries
d) Companies have an executive headquarters in their home country and have facilities in other countries
B
Which is NOT a reason for being a multinational corporation?
a) Access to lower production costs
b) Increased legal complexity
c) Avoidance of tariffs
d) Proximity to target international market
B
