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:

Revenue Variance

The difference between the actual revenue earned by a company and its expected (or budgeted) revenue.

Spending Variances

Variances that arise when there is a difference between the actual amount spent on a particular item or activity and the budgeted or forecasted amount.

Customers Served

Refers to the number of clients or customers that a business has provided goods or services to during a specific period.

Flexible Budget

A financial plan that is modified based on fluctuations in volume or levels of activity.