An MNC Frequently Uses Either Forward or Futures Contracts to Hedge

question 139

True/False

An MNC frequently uses either forward or futures contracts to hedge its exposure to foreign receivables. To do so, the MNC can either sell the foreign currency forward or sell futures.

Calculate after-tax lease payments and understand their impact on financial decisions.

Recognize the importance of the cost of borrowed funds and the tax rate in making leasing versus buying decisions.

Determine the incremental annual cash flow associated with leasing relative to purchasing.

Understand how the after-tax cost of debt influences leasing versus buying decisions.

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Definitions:

Victimized

The act of being made a victim or the process of being harmed or made to suffer physically, emotionally, or psychologically by others.

Legal

Pertaining to the law or the practice of law, including the system of rules that a particular country or community recognizes as regulating the actions of its members.

Financial Resources

Assets in the form of money or other valuables that an individual or organization can draw upon to fund its operations, investments, and to secure its future.

Coping Strategies

Techniques or methods that individuals use to handle, endure, or minimize stress and conflict in life.