The local currency should be used for performance evaluation purposes if
A) the MNE leaves considerable autonomy to the foreign operation.
B) sales are made in the foreign currency.
C) the foreign currency is relatively stable.
D) the local manager is given authority and responsibility to hedge foreign exchange differences.

Question

Quizplus · Accepted Answer

When an MNE leaves considerable autonomy to the foreign operation, it is appropriate to use the local currency for performance evaluation, as it aligns with the local management's control and decision-making environment.

The Local Currency Should Be Used for Performance Evaluation Purposes