Credit Policy for Multinational Firms Is Generally More Risky Due

question 15

True/False

Credit policy for multinational firms is generally more risky due in part to the additional consideration of exchange rates and also due to uncertainty regarding the credit worthiness of many foreign customers.

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Definitions:

Traveler's Checks

Preprinted, fixed-amount checks designed to allow the person signing them to make an unconditional payment to someone else as a result of having paid the issuer for this right.

Nontrade Receivables

Receivables that originate from transactions not involving the normal sale of merchandise or services, such as loans to employees or advances to suppliers.

Subsidiary Companies

Companies that are controlled by another company, known as the parent company, through ownership of more than half their voting stock or through other means.

Right of Return

A policy that allows customers to return purchased goods within a specified period if they are not satisfied.