The Assets of a Foreign Subsidiary of a U

question 14

Multiple Choice

The assets of a foreign subsidiary of a U.S.multinational corporation will experience a _____________________ if the foreign currency depreciates relative to the U.S.dollar,assuming that the dollar is the currency in which the parent company's assets are denominated.

• A)transaction gain
• B)transaction loss
• C)translation gain
• D)translation loss

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Definitions:

Environmental Changes

Alterations in the surrounding conditions, including natural, social, economic, and political environments, that can impact individuals and organizations.

Product Life Cycle

The series of stages a product goes through from introduction to growth, maturity, and decline, affecting marketing, sales strategies, and profitability.

Price Competition

A market condition where businesses focus on undercutting competitors' prices to attract customers.

Profit Declines

A decrease in the difference between revenues earned and expenses incurred over a given period.