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In Practice, Future Revenues Are Not Fully Predictable, So That

Question 35

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In practice, future revenues are not fully predictable, so that a 'rule of thumb' is needed in order to implement this approach; for example, the (say) exporter might borrow enough to hedge three years' revenue. He will also be subject to restrictions arising out of balance sheet ratios (e.g. the debt- equity ratio).

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