For each question state True or False and briefly explain why.

1. In international trade transactions, if an exporter uses accounts receivable financing and its foreign customer fails to make payment for any reason, the bank bears the loss.

2. When doing capital budgeting for an international project, multinational firms should adjust for host country risk factors by choosing a lower discount rate and lower estimated cash flow.

3. Unlike long-term financing, short-term financing often comes from internal sources of funds.