Which of the Following Is a Scenario Under Which a U.S.-Based

question 8

Multiple Choice

Which of the following is a scenario under which a U.S.-based MNC probably would not consider short-term foreign financing?

• A) Canadian dollars offer a lower interest rate than is available in the United States and are expected to appreciate over the maturity of the loan.
• B) Australian dollars offer a lower interest rate than is available in the United States and are expected to depreciate over the maturity of the loan.
• C) The MNC has net receivables in British pounds.
• D) Canadian dollars offer a lower interest rate than is available in the United States and are expected to appreciate over the maturity of the loan AND the MNC has net receivables in British pounds.
• E) None of these are correct.

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process or providing a service.

Single Plantwide Factory Overhead Rate

A method of allocating factory overhead to products based on a single, consistent rate applicable throughout the entire manufacturing plant.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating factory overhead.

Desk Lamp Production

The process involving the assembly, testing, and packaging of desk lamps for consumer use.