Differences in Business Traditions and Practices Could Make Cross-Country Ratio

question 50

Multiple Choice

Differences in business traditions and practices could make cross-country ratio analysis difficult.What should an analyst do to overcome this problem?

• A)Learn more about the business environment in relevant countries.
• B)Make all decisions using nominal monetary differences rather than ratios.
• C)Translate all ratios to a common currency.
• D)Avoid recommending investments in foreign companies.

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Definitions:

Present Value

Today’s value of a prospective amount of money or cash flow series, determined by a predefined rate of return.

Payment Options

Various methods available for consumers to make transactions, such as cash, credit cards, and electronic transfers.

Interest Rate

The percentage of a sum of money charged for its use, often expressed annually.

Interest

The cost of borrowing money or the return on investment, typically expressed as a percentage.