Whitewater ltd. is a UK company with sales to Canada amounting to C$8 million. Its cost of goods sold attributable to the purchase of Canadian goods is C$6 million. Its interest expense on Canadian loans is C$4 million. Given these exact figures above, the pound value of Whitewater's 'earnings before interest and taxes' would ____ if the Canadian dollar appreciates; the pound value of Whitewater's "earnings before taxes" would ____ if the Canadian dollar appreciates.
A) increase; increase
B) decrease; increase
C) decrease; decrease
D) increase; decrease
E) increase; be unaffected
Correct Answer:
Verified
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