Which of the following is NOT cited as a good reason for hedging currency exposures?
A) Reduced risk of future cash flows is a good planning tool.
B) Reduced risk of future cash flows reduces the probability that the firm may not meet required cash flows.
C) Currency risk management increases the expected cash flows to the firm.
D) Management is in a better position to assess firm currency risk than individual investors.
Answer: C
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Indicate whether the statement is true or false
Liabilities that might arise from which of the following probably would be disclosed only in the notes to the financial statements?
A) Possible warranty claims B) Guarantees of the debt of other companies C) Possible bankruptcy of an important customer whose account is current D) Estimated income taxes for the current year
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What will be an ideal response?
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