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Wonder Cat Licensing

Question 37

Multiple Choice

Wonder Cat Licensing
Wonder Cat is a popular new cartoon series created by the All Cartoon Channel (ACC) . Currently, the only Wonder Cat items available for sale are shirts sold exclusively through the ACC website. The cartoon series is a big hit in China, and as a result ACC has been approached by a Chinese firm about a licensing agreement. ACC executives are considering the pros and cons of such an agreement before making any final decisions.
-Which of the following most likely supports an ACC decision to enter into a licensing agreement with the Chinese firm?


A) Royalties from toys and apparel would be initially minimal.
B) The Wonder Cat concept could be easily counterfeited.
C) ACC would not have to invest much time or capital.
D) ACC would avoid paying U.S. taxes on Chinese exports.

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