question archive Grand L’eau Ltée (GLL), a French water treatment facility manufacturer, has received a contract to design, manufacture and install a water treatment facility in the Somalian city of Mogadishu
Grand L’eau Ltée (GLL), a French water treatment facility manufacturer, has received a contract to design, manufacture and install a water treatment facility in the Somalian city of Mogadishu
Subject:EconomicsPrice:2.87 Bought7
Grand L’eau Ltée (GLL), a French water treatment facility manufacturer, has received a contract to design, manufacture and install a water treatment facility in the Somalian city of Mogadishu. The contract is valued at EUR 1 million and will be paid by the buyer in EUR. GLL has never signed a contract outside of Europe and does not have any strategic partners it can leverage to ensure a successful completion of this contract. After multiple negotiations, the Executive Vice President of Business Development decided to sign the contract as a first step towards diversifying GLL’s market reach. GLL expects to complete the contract without any local partners. Which of the following will have an impact on GLL’s cash flow?
A Payment via letter of credit which has been secured in an escrow account of a Belgian bank in Antwerp.
B Fluctuations in the foreign exchange.
C Political tensions in Somalia can delay delivery and installation of the water treatment facility.
D Exchange controls.
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Answer:
B Fluctuations in the foreign exchange.
The above is the correct option explanation :- the currency fluctuation may vady the receipe of the dynamic domestic currency hence losses .
