Mercedes Will Add Cost to an Activity Only as Long

question 104

Short Answer

Mercedes will add cost to an activity only as long as that activity has a ____________.

---

Definitions:

Foreign Currency Risk

The possibility of losing value due to changes in the exchange rate between two currencies.

Fair-value Hedge

A strategy used in accounting to mitigate the risk of changes in the fair value of an asset, liability, or firm commitment through derivative contracts.

Cash-flow Hedge

A hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with an asset or liability or a forecasted transaction.

Purchase Order

An official document issued by a buyer committing to pay the seller for the sale of specific products or services.