Answer the following statements true (T) or false (F)
1. Present value is the amount a person would invest now to receive a greater amount in the future.
2. The future value is the bond's market price.
3. Money earns interest over time, a fact called the time value of money.
4. Future value is always less than present value.
5. When a bond is issued, the issue price is the present value of the interest payments the bondholder will receive while holding the bond, plus the present value of the bond principal that will be received at maturity.
1. TRUE
2. FALSE
3. TRUE
4. FALSE - Explanation: Present value is always less than future value.
5. TRUE
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Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. Increase = I Decrease = D No Effect = NA (Note that "No Effect" means that the event does not effect that element of the financial statements or that the event causes an increase in that element is offset by a decrease in that same element.)A transaction recorded as a debit to Cash and a credit to Common Stock.AssetsLiabilitiesStk. EquityRevenuesExpensesNet IncomeStmt of Cash Flows???????
What will be an ideal response?