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3 years ago

A company prepared the following journal entry:

Business

1 answer:

sineoko [7]3 years ago

6 0

Answer:

D. CFFO decreases by $8,000.

Explanation:

First and foremost, the amortization of discount on bonds payable would increase the book value of the bond by $2,000 since discount amortized is added to book value while premium amortized is deducted.

As a result, option A which stated that bonds payable book value increases by $8000 is wrong as well as option C since a discount amortization increases bonds payable book value and not the way around.

Cash account with a credit of $8,000 showed that the cash paid to bondholders was $8,000, hence, cash flows from operations (CFFO) should decrease by $8,000

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Why is it important to consider how you will spend your retirement when planning for retirement?

hjlf

Answer:

Retirement planning is important because it can help you avoid running out of money in retirement. Your plan can help you calculate the rate of return you need on your investments, how much risk you should take, and how much income you can safely withdraw from your portfolio.

Explanation:

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3 years ago

Outstanding debt of Home Depot trades with a yield to maturity of %. The tax rate of Home Depot is . What is the effective cost

nydimaria [60]

Answer:

5.6%

Explanation:

A lot of information is missing, so I looked for similar questions to fill in the blanks:

"Outstanding debt of Home Depot trades with a yield to maturity of 8%.

The tax rate of Home Depot is 30%.

What is the effective cost of debt of Home Depot?"

the effective cost of debt or after tax cost of debt = debt's yield to maturity x (1 - tax rate) = 8% x (1 - 30%) = 8% x 0.7 = 5.6%

Interest is tax deductible, therefore, it creates a tax shield that lowers net interest expense.

8 0

4 years ago

Because of large reserves that center around the Persian Gulf, the Middle East often produces as much as two-thirds of the world

gregori [183]

Your answer is D - petroleum.

the area around the Persian Gulf is desert so can't be the water, coal or cattle. But here it can be found large underground reserves of Petroleum.

8 0

3 years ago

Pharmco incurred the following costs while manufacturing its product: Materials used in production, $120,000; factory depreciati

AlekseyPX

Answer:

Total product costs for Pharmco are a. $303,000

Explanation:

Product cost comprises all the factory costs incurred, which are directly related to production.

Here Product costs will be as follows:

Materials used = $120,000

Add: Factory Depreciation = $60,000

Add: Labor costs = $95,000

Add: Factory Supplies = $8,000

Add: Property taxes on factory = $20,000

<u>Total Product costs = $303,000 </u>

7 0

3 years ago

The process of determining the probability that potential customers will not pay is called:

DENIUS [597]

The process of determining the probability that potential customers will not pay is called <u>"credit analysis".</u>

Credit analysis is a sort of analysis an investor or bond portfolio chief performs on organizations or other obligation issuing substances to gauge the element's capacity to meet its obligation commitments. The credit investigation looks to recognize the suitable dimension of default chance related with putting resources into that specific substance.

The result of the credit analysis will figure out what hazard rating to appoint the obligation guarantor or borrower. The hazard rating, thus, decides if to stretch out credit or advance cash to the obtaining substance and provided that this is true, the sum to loan.

5 0

3 years ago