MNCs May Be Able to Lock in a Lower Cost

question 19

Multiple Choice

MNCs may be able to lock in a lower cost from financing in a low interest rate foreign currency if they:

• A) have future cash inflows in that foreign currency.
• B) have future cash outflows in that foreign currency.
• C) have offsetting future cash inflows and outflows in that foreign currency.
• D) have no other cash flows in that foreign currency.

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Definitions:

Attorney

a professional licensed to practice law, offering advice, and representing clients in legal matters and court proceedings.

Bailment

A situation in which the personal property of one person (a bailor) is entrusted to another (a bailee), who is obligated to return the bailed property to the bailor or dispose of it as directed.

Bailee

The individual or party who temporarily receives possession, but not ownership, of personal property from another under a bailment agreement.

Dispose

To get rid of something, especially by throwing it away, selling it, or transferring it to someone else.