The following data relates to Alpha Inc. and Sigma Solutions: Which of the following statements is true of Alpha and Sigma?
A) Sigma Solutions is more multinational as its ratio of foreign sales to total sales is more than Alpha Inc.
B) Alpha Inc. is more multinational as its ratio of foreign employment to total employment is more than Sigma Solutions.
C) Sigma Solutions has a higher multinationality index than that of Alpha Inc.
D) Alpha Inc. has a higher multinationality index than that of Sigma Solutions.

Question

The following data relates to Alpha Inc. and Sigma Solutions:  Which of the following statements is true of Alpha and Sigma?
A) Sigma Solutions is more multinational as its ratio of foreign sales to total sales is more than Alpha Inc. 
B) Alpha Inc. is more multinational as its ratio of foreign employment to total employment is more than Sigma Solutions. 
C) Sigma Solutions has a higher multinationality index than that of Alpha Inc. 
D) Alpha Inc. has a higher multinationality index than that of Sigma Solutions.

Quizplus · Accepted Answer

The given data provides information on the multinationality index, which is calculated as the weighted average of the ratio of foreign sales, foreign assets, and foreign employment to total sales, total assets, and total employment. Based on the given data, Sigma Solutions has a higher ratio of foreign sales to total sales (70% vs. 50% for Alpha Inc.), and a higher ratio of foreign employment to total employment (60% vs. 40% for Alpha Inc.). Hence, the multinationality index of Sigma Solutions will be higher than that of Alpha Inc. Therefore, option C is the correct answer.

The Following Data Relates to Alpha Inc