MNCs May Be Able to Lock in a Lower Cost

question 40

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:

Complement Good

A product that is typically consumed together with another product, increasing the demand for both.

Substitute Good

A product or service that a consumer can use in place of another product or service.

Elastic Demand

A situation in which the demand for a product or service significantly changes in response to a change in its price.

End-of-aisle Displays

Promotional merchandise displays located at the end of store aisles, designed to attract customer attention and increase product sales.