Ajax International Always Invoices Its Customers in Hard Currencies

question 14

Multiple Choice

Ajax International always invoices its customers in hard currencies.What has the firm done to the currency risk that may prevent future sales?

• A) It has shifted the exchange rate risk entirely to the customer who may seek other suppliers with less rigid terms.
• B) It has shared the exchange rate risk with its customers who may object.
• C) It has done nothing to shift or share exchange rate risk with its customers.
• D) It has avoided the possibility of exchange rate controls imposed by the governments of its customers.

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Definitions:

4WD

Four-wheel drive, a system that powers all four wheels of a vehicle simultaneously for better traction.

Linear Rate

In the context of springs, a linear rate refers to a constant rate of compression or extension, meaning the force required to compress or extend the spring is consistent throughout its movement.

Variable Rate

An interest or finance charge rate that can change over the period of the loan or credit agreement, often tied to an index or benchmark.

Coil Springs

Mechanical devices that can compress or extend to absorb impact or maintain force between contacting surfaces.