Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. fairfield corp., a us firm, recently established a

Fairfield Corp., a US firm, recently established a subsidiary in a less developed country that...

70.2K

Verified Solution

Question

Accounting

Fairfield Corp., a US firm, recently established a subsidiary in a less developed country that consistently experiences an annual inflation rate of 80% or more. The country does not have an established stock market, but loans by local banks are available with a 90% interest rate in the host country. What is a key disadvantage of using this strategy that may cause Fairfield to be no better off than if it paid the 90% interest rate?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students