Which of the following is true of franchising?
a. It is a form of contract manufacturing.
b. It has grown rapidly in recent years.
c. It is restricted to the market of fast-food restaurants.
d. It requires an export agent and an export broker to be successful.
ANSWER: b
Franchising is a form of licensing that has grown rapidly in recent years. More than half of the international franchises are for fast-food restaurants and business services.
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Which of the following statements regarding methods to record investments after acquisitions is incorrect?
a) it is not relevent to the consolidated FS whether the parent company measures its investment account using the cost method or using one of the equity methods so long as the eliminating entries are properly prepared b) initial recording of the investment (At its cost) is identical in all three methods, i.e., cost, partial equity, or complete equity method c) under the equity method, the investor adjusts the investment account upward for its share of the investee's earnings and dividends declared d) for periods subsequent to acquisition, both the investment account and the equity in subsidiary income will be larger under the partial equity method than under the complete equity method if the subsidiary carries depreciable assets with market values greater than book values
An international strategy involves taking products first produced for the domestic market and then selling them internationally with _______________________
Fill in the blank(s) with the appropriate word(s).