Although MNCs May Need to Convert Currencies Occasionally, They Do

question 62

True/False

Although MNCs may need to convert currencies occasionally, they do not face any exchange rate risk, as exchange rates are stable over time.

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Definitions:

Net Operating Income

The profit generated from a business's normal core operations, excluding deductions of taxes and interest costs.

Turnover

The rate at which inventory is sold and replaced over a particular period, or the total sales volume.

Margin

The variance between the cost at which a product is sold and the expense incurred to create it, frequently conveyed as a proportion of the revenue.

Operating Expenses

Expenses incurred from normal business operations, excluding the cost of goods sold, such as selling, general, and administrative expenses.