Questions from Corporate Finance

Q: What is the essence of the theory of comparative advantage?

What is the essence of the theory of comparative advantage?

Q: MNEs strive to take advantage of market imperfections in national markets for

MNEs strive to take advantage of market imperfections in national markets for products, factors of production, and financial assets. Large international firms are better able to exploit such imperfect...

Q: In deciding whether to invest abroad, management must first determine whether

In deciding whether to invest abroad, management must first determine whether the firm has a sustainable competitive advantage that enables it to compete effectively in the home market. What are the n...

Q: Explain briefly how economies of scale and scope can be developed in

Explain briefly how economies of scale and scope can be developed in production, marketing, finance, research and development, transportation, and purchasing.

Q: A strongly competitive home market can sharpen a firm’s competitive advantage relative

A strongly competitive home market can sharpen a firm’s competitive advantage relative to firms located in less competitive markets. Explain what is meant by the “competitive advantage of nations.”

Q: The OLI Paradigm is an attempt to create an overall framework to

The OLI Paradigm is an attempt to create an overall framework to explain why MNEs choose FDI, rather than serve foreign markets through alternative modes. Explain what is meant by the O, the L, and th...

Q: In the context of unbundling cash flows from subsidiary to parent,

In the context of unbundling cash flows from subsidiary to parent, why might a host government be more lenient in its treatment of fees than its treatment of dividends? What difference does it make to...

Q: The operating cycle of a firm, domestic or multinational, consists

The operating cycle of a firm, domestic or multinational, consists of the following four time periods. For each of these periods, explain whether a cash outflow or a cash inflow is associated with the...

Q: Exhibit 19.1 shows the accounts payable period to be longer

Exhibit 19.1 shows the accounts payable period to be longer than the inventory period. Could this be otherwise, and what would be the cash implications?

Q: As a financial manager, would you prefer that the accounts payable

As a financial manager, would you prefer that the accounts payable period end before, at the same time, or after the beginning of the accounts receivable period? Explain.