Exchange rate risk refers to the risk that cash flows from a foreign project,when converted to the parent company's currency,will be worth less than was originally projected because of exchange rate fluctuations.

Question

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Exchange rate risk refers to the possibility of losing money due to fluctuations in the exchange rate when cash flows from a foreign project are converted into the parent company's currency. This can result in cash flows being worth less than expected, which can impact the profitability of the project.

Exchange Rate Risk Refers to the Risk That Cash Flows