A Japanese Firm Buys Lumber from Canada and Pays for It

question 79

Multiple Choice

A Japanese firm buys lumber from Canada and pays for it with yen. What are the effects of this transaction?

• A) Japanese net exports increase, and Canadian net capital outflow increases.
• B) Japanese net exports increase, and Canadian net capital outflow decreases.
• C) Japanese net exports decrease, and Canadian net capital outflow increases.
• D) Japanese net exports decrease, and Canadian net capital outflow decreases.

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Definitions:

Times Interest Earned Ratio

The Times Interest Earned Ratio measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Dividend Yield Ratio

A ratio that shows the annual dividends a company distributes in relation to its stock price.

Earnings per Share

A financial performance metric that calculates the portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability.

Equity Multiplier

A financial ratio indicating the portion of a company’s assets that are financed by stockholder's equity.