Which of the Following Statements About Multinational Working Capital Management

question 49

Multiple Choice

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

• A)Exchange rate changes can greatly influence the credit policies of multinational companies.
• B)Foreign governments generally do not restrict the amount of cash multinational corporations can return to their home countries.
• C)Multinational companies hold larger-than-normal amounts of inventory in countries where the chances of expropriation are high.
• D)Most multinational corporations prefer banking with the local banks where they operate rather than with mega international banks.
• E)The political and legal environments of many foreign countries are more helpful to multinational corporations in the collection of credit sales than in the United States.

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Definitions:

Purpose

The reason for which something is done or created, or for which something exists; intent or objective.

Instrument

A legal document formalizing an agreement or right, such as contracts, wills, or deeds.

Conditional Order

Refers to an order in a legal or financial context that will only be executed if certain conditions are met.

Negotiable Instrument

A financial document, such as a check or promissory note, that contains a promise to pay a specific amount of money to the bearer or assignee, which can be transferred by endorsement or delivery.