(a) Transaction exposure results from transactions that lead to known and contractually binding future foreign currency denominated cash inflows or outflows. As exchange rate changes between the time when the transaction was entered into and when these transactions are settled, so does the value of their associated foreign currency cash flows, resulting in foreign exchange gains and losses. An important task of the financial manager is to identify such exposure.

Elaborate in detail FOUR (4) common business activities of a multinational enterprise (MNE) that give rise to transaction exposure. Provide an example for each of the activities. (10 marks)