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A U.S.based MNC's consolidated earnings is concerned that it will be adversely affected by depreciation of foreign currencies used by its subsidiaries. Why is this
A U.S.based MNC's consolidated earnings is concerned that it will be adversely affected by depreciation of foreign currencies used by its subsidiaries. Why is this a translation risk for this MNC?
- Foreign earnings may be measured incorrectly.
- Foreign earnings are translated at the average exchange rate over the fiscal year.
- Foreign earnings may not be convertible to the home currency.
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