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CIPS Exam L4M7 Topic 4 Question 51 Discussion

Actual exam question for CIPS's L4M7 exam
Question #: 51
Topic #: 4
[All L4M7 Questions]

Amanda is the purchasing manager for AB Construction based in France. She is considering purchasing an asset from overseas but knows she must account for fluctuations in exchange rates in the contract. Is Amanda correct?

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Suggested Answer: B

Including a currency fluctuation clause protects against exchange rate volatility, which can increase the final cost if the currency depreciates. Whole-life asset management often incorporates such risk management measures to ensure cost predictability and avoid unanticipated financial impact on long-term projects.


by Afton at Dec 08, 2024, 07:03 AM

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Nana
1 months ago
Ah, the old 'let's just ignore the exchange rates' approach. Classic. Option B is the only way to keep your sanity, and your budget, intact.
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Bettyann
7 days ago
Latonia: Let's make sure Amanda includes that clause in the contract to avoid any surprises.
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Ricki
15 days ago
User 3: It's important to consider exchange rates when making international purchases. Option B is the best choice for us.
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Latonia
26 days ago
User 2: I agree, including a currency fluctuation clause is essential to protect our budget.
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Shawnda
1 months ago
User 1: Option B is definitely the way to go. We can't risk paying more than we planned for.
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Remona
1 months ago
Option D? Really? I wouldn't trust anyone to decide the exchange rates, that's just asking for trouble. Option B is the only way to go.
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Kristofer
2 months ago
Hold up, re-negotiating the price after the contract is signed? That sounds like a recipe for disaster. Option B is the clear winner here.
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Ellsworth
14 days ago
User 3: It's important to plan ahead for potential changes in exchange rates when making international purchases.
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Tran
15 days ago
User 2: Definitely, including a currency fluctuation clause is essential in this situation.
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Mitzie
16 days ago
User 1: I agree, option B is the best choice to protect against unexpected costs.
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Verda
2 months ago
C) I think the price can be re-negotiated post-contract sign-off, so Amanda should consider that option as well.
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Stephanie
2 months ago
B) I agree with Romana, including a currency fluctuation clause would protect AB Construction from unexpected costs.
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Natalie
2 months ago
A) No, as it will be better to purchase the asset in AB Construction's local currency as it would be efficient and more stable.
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Jerry
2 months ago
I'm with Frederick on this one. You never know how the exchange rates are going to move, so it's better to be safe than sorry.
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Jeannetta
1 months ago
User 2: Definitely, you never want to end up paying more than you budgeted for.
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Merlyn
2 months ago
User 1: I agree with Frederick, it's always best to plan for currency fluctuations.
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Romana
2 months ago
B) Yes, as AB Construction could pay more for the asset than intended and Amanda should include a currency fluctuation clause.
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Frederick
3 months ago
Option B is definitely the way to go. Exchange rate fluctuations can really mess up the budget, and including a currency clause is just good business sense.
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Maryrose
2 months ago
User 4: It's better to be safe than sorry when it comes to dealing with international transactions and exchange rate uncertainties.
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Pearlene
2 months ago
User 3: Absolutely, having a currency fluctuation clause in the contract can help mitigate risks and ensure the budget stays on track.
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Hester
2 months ago
User 2: I agree. It's important to protect the company from unexpected costs due to exchange rate changes.
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Thea
2 months ago
User 1: Option B is definitely the way to go. Exchange rate fluctuations can really mess up the budget, and including a currency clause is just good business sense.
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