Which of the Following Statements Is True About Multinational Working

question 46

Multiple Choice

Which of the following statements is true about multinational working capital management?

• A) Exchange rate changes influence the credit policies of multinational companies.
• B) Foreign governments often encourage cash to be taken out of their countries.
• C) If the probability of expropriation is large, the inventory holdings will be maximized.
• D) Most multinational corporations prefer banking with the local banks where they operate.
• E) The political and legal environments of foreign countries are conducive to collect defaulted accounts.

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Definitions:

Low-Opportunity Cost

Describes a situation where choosing one option over another entails a minimal sacrifice of alternative opportunities or benefits.

International Trade

The trading of products, services, and financial assets between different countries or territories.

Production

The process of creating goods or services by combining labor, capital, and resources to meet consumer demands or needs.

Currencies

Systems of money in general use in particular countries or geopolitical regions.