Question

Dave is an executive at a large company. He is concerned that other businesses in his industry have been moving some of their operations to foreign countries in order to cut down on labor costs. The CEO has asked Dave to make a recommendation on what the company should do. Dave always acts in the company's best interest. For what reason might Dave recommend not moving operations overseas?

The cost of labor is much lower overseas, so the company could save money by moving its operations.
The company was given tax incentives to keep their operations local that cancel out their expected savings.
Dave's brother is a factory worker and would lose his job as a result of moving operations overseas.
Dave knew that competitors with new foreign operations maintained high customer satisfaction.

Answer 1

I believe it's the second one, 'the company was given tax incentives...' since it could be considered a no loss situation if they move or stay.
and the last one is rather based on opinion, not on facts.

Answer 2

The correct answer is B) The company was given tax incentives to keep their operations local that cancel out their expected savings.

The reason why Dave might recommend not moving operations overseas is "The company was given tax incentives to keep their operations local that cancel out their expected savings."

Dave is suggesting that the best option is to stay and not moving out operations to other countries that have cheap labor and this allows the company to low cost. Dave assures that the company was given tax incentives that are better than the savings expected abroad. These incentives allow the company to stay there, keep the jobs in place, support the employees, and the local community.

Tax incentives are a good way to keep companies from moving to other countries.