A Negative Effective Financing Rate Indicates That an MNC

question 32

Multiple Choice

A negative effective financing rate indicates that an MNC:

• A) paid only a small amount in interested over and above the amount borrowed.
• B) has been negatively affected by a large appreciation of the foreign currency.
• C) actually paid fewer dollars to repay the loan than it borrowed.
• D) would have been better off borrowing in the U.S.

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Definitions:

Budgeted Receipts

The anticipated revenues or income expected to be received within a specified budget period.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, helping businesses manage their liquidity.

Budgeted Disbursements

Planned financial outflows or payments calculated in advance as part of a budgeting process, often categorized and scheduled over a specific period.

Desired Balance

The target or goal for the balance of an account or budget at a specific point in time.