Assume that company executives at the firm would like to increase sales by expanding into an international market.Which of the following factors, if true, best supports a decision to expand sales globally?
A)It can offshore most of its production.
B)It can obtain all of its resources for the same price overseas.
C)Its costs of making additional sales would not increase disproportionately.
D)The foreign market has higher real interest rates.

Question

Quizplus · Accepted Answer

If the costs of making additional sales do not increase disproportionately, the company can potentially achieve a higher profit margin by expanding sales globally. Offshoring production and obtaining resources for the same price overseas may be cost-saving measures, but they do not necessarily guarantee increased sales. The foreign market having higher real interest rates may actually hinder the company's ability to borrow and invest in that market.

Assume That Company Executives at the Firm Would Like to Increase