There are different and incompatible economic goals. (APEX Class ;)
Answer:
The answer is 7.65%
Explanation:
The cost of capital is equal to the cost of debt in this example as it involves a debt instrument. The formula for the cost of debt is as follows:
(Interest Expense x (1 – Tax Rate) ÷ (Amount of Debt – Debt Acquisition Fees + Premium on Debt – Discount on Debt)
In the example, the given values are the following:
Interest Expense = 7% x $1,000 = $70 (no tax rate was provided)
Amount of debt = $1,000 (face value of the bond)
Debt acquisition fee = $15
Discount on debt = $70 ($1,000 face value vs. the $930 proceeds of the bond, the bond was issued at a discount)
Solution:
$70 ÷ ($1,000 - $15 - $70) = 7.65% cost of capital (cost of debt)
Answer: (B) Promotional strategy
Explanation:
The promotional strategy is one of the type of marketing strategy in which the various types of products and the services are get promoted by the various types of techniques such as public relation, advertising, sales promotion and the social media.
The promotional strategy provides various types of benefits as it increase the productivity of the products and the services in the market.
There are usually four types of promotional strategy that are:
- Advertising
- Personal selling
- Publicity
- Sales promotion
Therefore, Option (B) is correct.
Answer:
$304,500
Explanation:
Interest payable on December 31, year 1 = $290,000 * 5%
Interest payable on December 31, year 1 = $14,500
Total amount of liabilities to be reported on the Balance Sheet, year 1:
= $290,000 + $14,500
= $304,500
So, the total amount of liabilities related to these bonds that will be reported on the balance sheet at December 31, Year 1 is $304,500.
