Question

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 an American company that produces high-tech electronics. Its managers have decided to move some of its production facilities to Japan in an attempt to circumvent certain governmental regulations. Which of the following best describes the reason RTE Telecom Inc. has decided to go global? To avoid political, trade, and regulatory hurdles To seek production efficiency To broaden its markets Now consider the case of Blue Moose Producers. To conceal its trade secrets, Blue Moose Producers has decided to invest abroad instead of licensing to local foreign firms. Blue Moose Producers 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 exposure to risks that arise from complex tax laws and multiple money markets.

Answer 1

1. To avoid political, trade, and regulatory hurdles

2. protect processes and product

3. increased

Step-by-step explanation:

RTE Telecom Inc. moved some of their facilities to Japan because they wanted to go around certain government regulations which means that they left to avoid regulatory hurdles.

In investing abroad instead of licensing to local firms, Blue Moose hopes to conceal its trade secrets. They therefore went global in order to protect the processes by which they make their products.

3. Compared to domestic corporations, multinational corporations have increased exposure to risks that arise from complex tax laws and multiple money markets.

Companies in various countries will be exposed to different tax laws, some of which will be more complicated than that of their home countries. They will also face different money market situations arising from the various currencies they encounter.

They therefore have a higher exposure to risks that emanate from these than domestic companies.