Even if translation exposure does not affect cash flows, it is a concern of many MNCs.

Question

Quizplus · Accepted Answer

Translation exposure refers to the risk of fluctuations in exchange rates affecting the financial statements and the reported earnings of a multinational corporation (MNC). Even though it may not impact the MNC's cash flows directly, it can have an impact on its competitiveness, ability to attract investors, and tax liabilities. Hence, it is a concern of many MNCs.

Even If Translation Exposure Does Not Affect Cash Flows, It