The Extent to Which the Firm's Operating Cash Flows Would

question 37

Multiple Choice

The extent to which the firm's operating cash flows would be affected by random changes in exchange rates is called

• A)asset exposure.
• B)operating exposure.
• C)both a and b
• D)none of the above

---

Definitions:

Cash Payment

The act of disbursing money to settle a transaction, bill, or debt.

Principal Balance

The original sum of money borrowed in a loan or the remaining balance of a loan excluding interest.

Times Interest Earned

A ratio that measures a company's ability to meet its debt obligations based on its earnings before interest and taxes.

Net Income

The amount of money a company ultimately earns once it subtracts expenses and taxes from its gross revenue.