Reference no: EM131352343

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