FTX,a US Electronics Firm,has Operations in Japan

question 45

Multiple Choice

FTX,a U.S. electronics firm,has operations in Japan. Currently,the yen is rising against the dollar. Which of the following will most likely occur?

• A) Translated earnings will be higher than before the strengthening of the exchange rate.
• B) Translated earnings will be lower than before the strengthening of the exchange rate.
• C) There will be no gain or loss on translating the financial statements into dollars.
• D) The gains or losses will not affect earnings per share and stock prices.

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Definitions:

Conforming Goods

Products that meet the specifications and requirements stipulated in a sales or supply contract.

Basic Duty

An essential or fundamental obligation required by law, contract, or ethical considerations.

Usage of Trade

Established customs and practices in a particular industry or market that are widely accepted and that parties to a contract are presumed to follow.

Customs

The official department that oversees the importation and exportation of goods in and out of a country, implementing national regulations and duties.