One Reason an MNC May Consider Foreign Financing Is That

question 5

True/False

One reason an MNC may consider foreign financing is that the proceeds could be used to offset a foreign net payables position.

---

Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Discounting

The process of determining the present value of future cash flows by applying a particular interest rate; often used in investment and finance.

Present Value

The value today of a future amount of money or sequence of cash inflows, accounting for a defined rate of return.

Interest Rate

The percentage of a sum of money charged for its use, serving as the cost of borrowing or the reward for saving.