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ycow [4]
3 years ago
8

Canterbury Co. issues a discounted, non-interest-bearing note in exchange for borrowed funds. Choose whether the cash received w

ill be higher or lower than the face value of the note, and whether the effective annual interest rate will be higher or lower than the discount rate: Cash Received vs. Face Value of Note Effective Rate vs. Discount Rate a. Higher Lower b. Lower Higher c. Lower Lower d. Higher Higher
Business
1 answer:
tia_tia [17]3 years ago
4 0

Answer:

b. Lower Higher

Explanation:

As non interest bearing notes are issued on deep discounted value. The face value of the note is discounted to calculate the cash receipt from the issuance. So, the cash received will be higher than the face value of the note.

If the non interest bearing note is issued on a discounted value the effective interest rate will be higher than the discount rate of the bond because the investor demands the required rate of return which is used to discount and calculating effective rate using discounted value will result the higher rate.

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People consumes less of alcohol and more of non alcoholic drinks.

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Now-a days people consumes less of alcoholic drinks as non alcoholic beverages or drinks are becoming non popular day by day. People have become more health conscience and wants to remain fit. Now wonder alcohol causes a lot harm to the human health. People now are aware of the side effects of consuming alcohol.

In the recent years the life style of the people have change a lot and they they have become health conscious than before. The consumption of other non alcoholic drinks have become familiar and famous including green tea, fruit juices, goji juice and many more.

The bar managers also face difficulty in serving alcohol to people as people refuse to drink them. They are more health conscience and is aware of the fatal incidents about drunk driving. They prefer other non beverages in the bar. As a result the sale of alcohol has decreased a lot. There are also various awareness programs running against consumption of alcohol.Thus people do not drink alcohol any more and so it is difficult for the bar managers to offer alcohol to their customers.

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