Which of the following is a reason why budgets in multinational companies are not used to evaluate the firm's performance relative to its budgets?
A) Evaluations based on budgets can be meaningless due to factors such as exchange rate risk and other volatility.
B) Evaluations based on budgets are not possible because of cultural differences in the budgeting approach.
C) Evaluations based on relative regional performance are considered more meaningful as compared to evaluations against budgets.
D) Evaluations based on budgets are harder when managers use sophisticated techniques to minimize foreign currency exposure.

Question

Quizplus · Accepted Answer

Budgets in multinational companies can be affected by various factors such as exchange rate risk and other volatility. As a result, evaluations based on budgets may not accurately reflect the company's performance. Therefore, relative regional performance evaluations are considered to be more meaningful than evaluations against budgets.

Which of the Following Is a Reason Why Budgets in Multinational