A US MNC Has the Equivalent of $1 Million Cash Outflows

question 6

Multiple Choice

A U.S. MNC has the equivalent of $1 million cash outflows in each of two highly negatively correlated currencies. During ____ dollar cycles, cash outflows are ____.

• A)weak; somewhat stable
• B)weak; favorably affected
• C)weak; adversely affected
• D)none of the above

---

Definitions:

Acquisition Differential

The difference between the purchase price of a company and the fair value of its identifiable net assets at the time of acquisition.

Amortized

The process of spreading the cost of an intangible asset over its useful life, or the gradual reduction of a debt through regular payments of principal and interest over a set period.

Undervalued Equipment

Equipment whose market value is higher than its book value or valuation on financial statements, suggesting it may be worth more than it appears.

Non-Controlling Interest

A share in the equity and profits of a subsidiary that are not owned by the parent company.