An effective way for an MNC to assess its economic exposure is to review the firm's:

Question

Quizplus · Accepted Answer

The income statement shows the revenue and costs of a company over a certain period of time. By analyzing the income statement, an MNC can assess its economic exposure by identifying how changes in exchange rates impact revenue and costs. For example, if a firm has significant revenue in a foreign currency but incurs most of its costs in a different currency, a change in exchange rates could significantly impact profitability. Therefore, reviewing the income statement is an effective way to assess economic exposure. Liquidity, retained earnings, and stockholders' equity are important financial metrics but they do not directly measure economic exposure.

An Effective Way for an MNC to Assess Its Economic