You Work for a Company Where the CFO Thinks That

question 12

Essay

You work for a company where the CFO thinks that the value of the firm's assets fluctuate widely with the euro-dollar exchange rate does not want to hedge the firm's exchange rate risk because he thinks it is impossible.How can you convince him to hedge?

Understand the impact of changes in working capital accounts on cash flows.

Determine cash flows related to the acquisition and disposition of fixed assets.

Calculate and interpret free cash flow.

Recognize the treatments of specific items (e.g., depreciation, gains, and losses) in the statement of cash flows.

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Definitions:

Process Consultation

A method of organizational intervention where a consultant helps a client understand and improve internal processes through facilitated analysis and feedback.

Force Field Analysis

A decision-making tool used to analyze the forces for and against a change, helping in the identification of factors that influence behavior and decision-making.

Power Players

Individuals who hold significant influence or authority within an organization or field, often shaping outcomes and decisions.

Global Market

The worldwide economic area that allows for the buying, selling, and trading of goods and services across national borders.