Introduction Financial management within organizations incorporates various responsibilities such as evaluation of all investment projects and various sources of funding such projects. Organizations require application of excellent management principles for profit to be realized. Such actions reinforce investor and shareholder confidence in the organization. Areas in which purely domestic firms are exposed to international risks Purely domestic firms face transaction exposure where most business transactions (imports or exports) are denominated in foreign currency. Domestic companies in US face currency risks since at times the raw materials purchased are priced in foreign currencies other than USD (Butler, 2004). Then there is operating exposure concerned with changes in real exchange rate which determines various changes in relative prices, which ultimately determines firm’s general performance. Domestic firms also face economic flows associated with floating cash flows as well as projected cash sales of available. There is high possibility of reduction on future sales and cash flows in the event that home currency used in exchange, trades lower than that of a foreign competitor transacting business with the same domestic customer (Butler, 2004). At the same time, purely domestic firms are exposed to translation risks where there is application of different accounting rules. This emerges whenever domestic firms transact business with firms having foreign roots. There is a high possibility of loosing some finances in the process of translating financial statements and cash flows into acceptable accounting standards e.g. US uses GAAP standards (Butler, 2004). Definition and discussion of major differences between domestic and multinational firm A multinational corporation (MNC) can be referred to as the kind of business firm with operations in other countries and has production and sales operations internationally other than parent country (Kasibhatla et al., 2001). Domestic firm on the other hand refers to firms having major commercial activities and processes taking place within borders of parent country. Such company has the benefit of dealing with domestic provisions such as currency, culture, government legislations as well as tax system (Eiteman et al., 2010). Domestic and multinational firms differ based on Multiculturalism and geographic dispersion. Multiculturalism can be observed as having tremendous contributions towards increasing creativity and innovation due to accumulation of vast experiences, skills and knowledge from diverse background. It also improves sensitivity in dealing with different customers including foreigners and super-organizational culture. Multiculturalism also enables MNC adapt to wider range of environments hence change appropriately. At the same time, engaging firms into global integration of activities assist them in realizing increased economies of scale and scope hence lowering costs of production (Eiteman et al., 2010). Discussion on ways that firms benefit in the international market Firms operating within international market can benefit from interest rate swap and currency swap. Firms benefit from such swaps in such a way that they assist companies in managing exposure to fluctuations in interest rates. At the same time swaps reduces cases of uncertainties on projected financial cash flows. Howeve