With Regard to Foreign Currency Translation Methods Used by Foreign

question 5

Multiple Choice

With regard to foreign currency translation methods used by foreign MNCs,

• A)foreign currency translation methods are generally only used by U.S.-based MNCs since foreign firms have a built in hedge by being foreign.
• B)are generally the same methods used by U.S.-based firms.
• C)are exactly the same methods used by U.S.-based firms since GAAP is GAAP.
• D)none of the above are true statements.

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Definitions:

Import Goods

These are products brought into one country from another for sale.

Scarce Factors

Resources that are limited in availability and are constraint to economic production.

Capital

Refers to financial assets or physical resources that are used in producing goods or providing services.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than others.