An Australian Company with Subsidiary Operations in a Number of International

question 57

Multiple Choice

An Australian company with subsidiary operations in a number of international markets has an audit into its financial risk exposures that reveals it has a potential exposure to translation risk.Which of the following statements relates to its translation risk exposure?

• A) The company has export contracts written in USD receipts over the next twelve months.
• B) Interest repayments on euromarket funding are payable in DEM.
• C) Assets and liabilities of its subsidiary companies are denominated in foreign currencies.
• D) All of the given answers are correct.

---

Definitions:

Spans of Control

The number of subordinates directly supervised by a manager, affecting the structure and efficiency of organizational communication and decision-making.

Adaptive Organization

An organization that is capable of adjusting its strategies, processes, and structures in response to environmental changes and new information.

Flexible Conditions

Situations or environments that can easily adapt or adjust to changing circumstances or requirements without significant disruption.

Environmental Demand

Represents the pressures and requirements placed on an organization or individual by environmental factors, including natural, social, and regulatory aspects.