Which of the following statements is true regarding the revenues of multinational businesses?

• A. They often earn revenues in multiple currencies across different countries.
• B. Their revenues are exclusively generated from their home country.
• C. Their revenues are unaffected by exchange rate fluctuations.
• D. Multinational businesses are prohibited from earning revenues outside their domestic market.

Answer: (A)

Verified step by step guidance

1. Understand the definition of a multinational business: it is a company that operates in multiple countries, often having production, sales, or services in various international markets.
2. Recognize that because multinational businesses operate in different countries, they typically earn revenues in multiple currencies, corresponding to the local currencies of the countries where they do business.
3. Consider the implications of exchange rates: since revenues come in different currencies, fluctuations in exchange rates can affect the reported revenues when converted back to the home currency.
4. Evaluate the incorrect statements: revenues are not exclusively from the home country, they are affected by exchange rate fluctuations, and multinational businesses are not prohibited from earning revenues outside their domestic market.
5. Conclude that the true statement is that multinational businesses often earn revenues in multiple currencies across different countries.