Suppose Banana Computers has a foreign subsidiary with a 3 million pound payable due on October 1,as well as 2 million pound receivable due on September 1.One way the firm could avoid transaction costs is:
A) Lagging currency flows
B) Capital budgeting
C) Risk analysis
D) Transfer pricing

Question

Quizplus · Accepted Answer

Lagging currency flows involves delaying or accelerating payments or receipts to benefit from expected changes in exchange rates, which can help a firm like Banana Computers manage its foreign currency payables and receivables without incurring transaction costs.

Suppose Banana Computers Has a Foreign Subsidiary with a 3