A restaurant chain based in Hong Kong plans to open a series of restaurants in the United States to gain access to low-cost capital for its expansion efforts. Which of the following, if true, would most strongly support the claim that establishing U.S. operations would NOT be the best choice for providing the chain access to the low-cost capital it seeks?
A) Relocation to the U.S. would involve substantial cross-cultural risk.
B) U.S. funding sources are more expensive than capital sources in many other promising locations.
C) The company has attracted significant interest from American venture capitalists.
D) U.S. funding offered in the hospitality sector tends to be more expensive than funding for health care firms.

Question

Quizplus · Accepted Answer

The statement that U.S. funding sources are more expensive than capital sources in many other promising locations would provide strong evidence that establishing U.S. operations would not be the best choice for providing access to low-cost capital. The other answer choices are either not directly related to the cost of capital or suggest that the company may have favorable access to U.S. funding sources.

A Restaurant Chain Based in Hong Kong Plans to Open