A U.S. firm is considering investment in either Canada or Mexico, but not both. It might select:

Canada, because the U.S. dollar is expected to depreciate against the Canadian dollar

Mexico, because the peso is expected to depreciate against the U.S. dollar

Mexico, because the U.S. dollar is expected to appreciate against the peso

Canada, because the Canadian dollar is expected to depreciate against the U.S. dollar

none of the above

MADCO, a U.S. company, exports to other countries. The company sells its accounts receivable without recourse. Factoring involves

purchase of accounts receivable by a factor

accounts payable financing

working capital financing

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none of the above

A MNC could do which of the following to make it desirable to the host government:

use local employees for managerial positions

purchase supplies in the host country

Reinvest profits in the host country

All of the above

None of the above

A MNC might establish a manufacturing facility in a foreign country because:

labor costs are lower

tax rates are lower

the host government offers incentives

expenses are lower

all of the above

MNCs who want to retain liquidity may invest excess cash in:

international equity markets

international bond markets

international medium-term debt markets

international money markets

all of the above

A method of payment that is an unconditional promise by one party, instructing the buyer to pay the face amount upon presentation is a:

banker's acceptance

trade acceptance

letter of credit

bill of lading

none of the above

Assume a Canadian firm initiates direct foreign investment in the U.S. The Canadian dollar is expected to depreciate against the U.S. dollar. The C$ dollar value of earnings remitted to the parent Canadian company should:

decrease because the U.S. dollar will buy more Canadian dollars

decrease because the U.S. dollar will buy fewer Canadian dollars

increase because the U.S. dollar will buy more Canadian dollars

increase because the U.S. dollar will buy fewer Canadian dollars

none of the above