Answer:
The answer is a. The project will utilize some equipment the company currently owns but is not now using.
Explanation:
If you look at all the other options that are listed here, they either are a significant sum to the company or has a significant the opportunity cost. In this one, company uses idle assets and therefore bears no opportunity cost.
The drawback would be that many crimes would go unpunished. Some victims could be too scared, some would prefer to forget about the crime and focus on other things in their lives.
Also, it could encourage people to kill their victims, as they would have noone that could prosecute them.
Answer:
1) A bond of an Eastern European government
2) A bond that repays the principal in year 2040
3) A bond from a software company you run in your garage
4) A bond issued by the federal government
Explanation:
Term: Long-term bonds are riskier than short-term bonds because holders of long-term bonds have to wait longer for repayment of principal. To compensate for this risk, long-term bonds usually pay higher interest rates than short-term bonds.
Credit risk: When bond buyers perceive that the probability of default is high, they demand a higher interest rate as compensation for this risk.
Tax treatment: When state and local governments issue bonds, the bond owners are not required to pay federal income tax on the interest income. Because of this tax advantage, bonds issued by state and local governments typically pay a lower interest rate than bonds issued by corporations or the federal government.
Answer:
Explanation:
Discount on bond = Par value of bond - Issued price of bond = 500,000-463,140=36,860
2)
500,000*0.09 = 45,000
22,500 semiannually
Amount repaid:
Six payments (22500*6) 135,000
Add: Maturity value 500,000
Total amount repaid 635,000
Less: Amount borrowed (463,140)
Total bond interest 171,860
Total bond interest expense recognized 171,860
Answer:
underestimated inventory
net income decrease
higher storage expenses
Explanation:
decrease in net income since it could not be sold
higher expenses for storage to maintain inventory
