Which of the following is an advantage of offshoring?

A) Hidden costs and risks are rarely involved in offshoring.
B) U.S. firms can charge lower prices through offshoring.
C) Offshoring is the best way to improve business agility.
D) Information risks are low when offshoring services.
E) Offshoring is the best way to increase customer responsiveness.

Answer: B
Explanation: For goods in which labor represents a significant portion of production costs, dramatically lowering labor costs through offshoring lets a company lower its prices to consumers.

Business

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Due to data errors occurring from time to time in processing the Albert Company's payroll, the company's management is considering the addition of a data validation control procedure that is projected to reduce the risk of these data errors from 13% to 2%. The cost of the payroll reprocessing is estimated to be $11,000. The cost of implementing the data validation control procedure is expected to be $700. Which of the following statements is true?

A) The data validation control procedure should be implemented because its net estimated benefit is $510. B) The data validation control procedure should be implemented because its cost of $700 is less than the payroll reprocessing cost of $1,430. C) The data validation control procedure should not be implemented because its cost of $700 exceeds the expected benefit by $480. D) The data validation control procedure should not be implemented because its net estimated benefit is a negative $1,210.

Business

When a company chooses to divest a particular strategic business unit, it ________

A) increases the advertising budget for that strategic business unit B) invests more in the strategic business unit to build its market share C) sells off or phases out the strategic business unit D) invests just enough in the strategic business unit to keep its market share at the current level E) gradually increases investment in the strategic business unit over time to maximize profits

Business