QUESTION 6 Australia-based MNCs invoicing in Asian currencies and incurring expenses in Asian currencies will probably...

QUESTION 6 Australia-based MNCs invoicing in Asian currencies and incurring expenses in Asian currencies will probably be less affected by weakness in Asian currencies than Australia-based MNCs that invoice in Asian currencies but do not incur expenses in those currencies.

True

False

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Expert Solution

True.

Australian MNC which is invoicing and incurring expense in Asian currency will be impacted less severely than MNC which invoice in Asian currency, but do not incur expenses in those currencies.

This is because when currencies are weakening, the revenues derived from the invoices made in asian currency will weaken, and if corressponding expenses are not incurred in same Asian currencies then the expenses will be greater in value, when compared to incurring the same in Asian currency.

This will lead to the company which invoices in Asian currency but do not incur expense in the same currency to have lower profits.

jeff jeffy answered 2 years ago

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