Nestlé Wishes to Obtain a Loan Denominated in Swiss Francs

question 20

Multiple Choice

Nestlé wishes to obtain a loan denominated in Swiss francs but considers the U.S.market to offer better terms.How can Nestlé accomplish this?

• A)Borrow francs in Switzerland, exchange for dollars and arrange a currency swap
• B)Borrow francs in Switzerland, exchange for dollars and arrange an interest-rate swap
• C)Borrow dollars in U.S., exchange for francs and arrange an interest-rate swap
• D)Borrow dollars in U.S., exchange for francs and arrange a currency swap

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Definitions:

Factory Supervisor

An individual responsible for overseeing the operations and workers in a factory, ensuring production targets and quality standards are met.

Wages

Payments made to employees for their labour or services, typically calculated on an hourly, daily, or weekly basis.

Direct Materials

The raw materials directly traceable to the production of specific goods or services, considered a variable cost.

Period Cost

Expenses that are not directly tied to the production of goods, such as selling, general, and administrative expenses, which are expensed in the period incurred.