Exam 17: Financial Management

Exchange rate movements are inherently ________.

The euro is one of the world's primary currencies and is expected to maintain its value well over time.

Diversification is an active rather than a passive solution to the exposure problem.

The sum of the present values of all cash inflows and outflows from an investment project discounted at the cost of capital is known as ________.

Risk-sharing agreements became something of a rarity during the ________,when exchange rates were relatively stable.

Germany's income tax rate is relatively ________.

Sales taxes,severance taxes,and tariffs are examples of ________.

The leadership of the multinational firm is attempting to achieve ________.

Agreements between firms and banks which permit the firm to either sell or buy a specific foreign currency at a future date at a known price are called hedges.

Among the 30 industrialized countries in the Organization for Economic Cooperation (OPEC),only ________ has a higher tax rate than the U.S.

________ dictates that the management of the company should actively seek to maximize the returns to stockholders by working to push shares prices up and to continually grow the dividends paid out to those same shareholders.

There are strong economic arguments against countertrade activity.

What is a capital budget? List and briefly describe the three primary cash flow components of a capital budget.

________ arise from the funding activities of the firm.

Exchange rate movements are inherently random.

Taxes are generally classified as:

Of the following,which is NOT true of countertrade?

________ exposure and ________ exposure are "true exposures" in the financial sense.

Nations usually follow one of two basic approaches to international taxation:

The prices at which a firm sells its products to its own subsidiaries and affiliates are called ________.