Which of the Following Is Not True About Budgeting in Multinational

question 47

Multiple Choice

Which of the following is not true about budgeting in multinational companies?

• A)Managers reduce the possible negative impact on performance caused by unfavorable exchange rate movements.
• B)Managers need to understand the political,legal,and economic movements in the different countries that engage in corporate operations.
• C)Countries that have high annual inflation rates have sharp declines in the value of the currency.
• D)The purpose of budgeting in multinational companies is
• E)Managers do not need to consider differences in tax regimes because the company transfers goods and services across the many countries in which it operates.

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Definitions:

Gross Profit Method

An inventory estimation method used to estimate the cost of goods sold and ending inventory based on the gross profit margin.

Retail Inventory Method

An accounting method used in the retail industry to estimate inventory cost by relating the cost of merchandise and its retail price.

Retail Inventory Method

An accounting method used by retailers to estimate inventory cost by using a cost-to-retail price ratio.