Firms Must Consider the Impact of Exchange Rate Risk If

question 23

Multiple Choice

Firms must consider the impact of exchange rate risk if ________ of the project are affected by exchange rate changes.

• A)cash flows
• B)revenues
• C)costs
• D)capital costs
• E)depreciation expenses

---

Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control them.

Book Value

The net value of a company's assets minus its liabilities, often used as a measure of its equity.

Net Income

Net earnings of a firm post the subtraction of taxes, costs, and other expenditures from its aggregate revenue.

Significant Influence

The power to participate in financial and operating policy decisions of a business, but not control those policies.