From the Perspective of a Corporate CFO,when Hedging a Payable

question 75

Multiple Choice

From the perspective of a corporate CFO,when hedging a payable versus a receivable

• A)credit risk considerations are more germane for a payable.
• B)credit risk considerations are more germane for a receivable.
• C)none of the options

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Definitions:

Variable Costs

Expenses that change in proportion to the level of production or sales activities, such as raw materials and direct labor costs.

Actual Costs

The real costs incurred in the production of goods or the provision of services.

Revenue Variance

The difference between actual revenue and budgeted or forecasted revenue, indicating the performance of a business.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting in variable operational conditions.