The Functional Currency Is

question 18

Multiple Choice

The functional currency is

• A) the U.S. dollar.
• B) any currency other than the parent currency.
• C) the currency of the primary economic environment in which the firm operates.
• D) the currency in the country where the foreign firm is operating as long as it is also the reporting currency.

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Definitions:

Years

Units of time that represent a period of approximately 365 or 366 days, based on the Earth's orbit of the sun.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as part of retirement planning.

Discount Rate

The interest rate by which future cash flows are devalued to their present worth in a DCF analysis.

Cash Flows

represent the net amount of cash and cash-equivalents being transferred into and out of a business.