Typically, which of the following would be considered to be the most indicative of a firm's short-term debt paying ability?
a. Working capital
b. Current ratio
c. Acid test
d. Cash ratio
e. Days' sales in receivables
B
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On February 1, 2013, Janet buys a bond for $10,000 that makes coupon payments of $600 after each of the following two years and returns its principal of $10,000 at the end of the second year. In other words, it is a standard coupon bond with a 6 percent annual interest rate making payments once each year.On February 1, 2014, Janet receives her first coupon payment of $600. At that time, the market interest rate on bonds like hers has fallen to 4 percent. She sells her bond to Justin at that time, for a price equal to the present value of the bond's payments.
a.How much does Justin pay Janet for the bond?Both Janet and Justin have tax rates of 30 percent on interest income and 20 percent on capital gains. (Note that if someone has a capital loss, you may assume that he or she can reduce taxes by the amount of the capital loss times the tax rate of 20 percent.) b.Calculate Janet's after-tax rate of return for the past year (from Feb. 1, 2013, to Feb. 1, 2014).Justin holds onto the bond from February 1, 2014, to February 1, 2015, so it matures and he receives the second coupon payment and the principal. c.What is Justin's after-tax rate of return for the year from Feb. 1, 2014, to Feb. 1, 2015?Explain and show all your work for each part. You may assume, of course, that the market works and does not malfunction. What will be an ideal response?
Accounting professionals should understand database systems for all of the following reasons except:
A. Accountants frequently help improve business and IT processes. B. Accountants typically manage organizations' operational databases. C. Accountants increasingly participate in creating internal control systems. D. Accountants have a strong understanding of risks, controls and business processes.
How is the purchase of long-term investments in bonds accounted for when purchased between interest payment dates?
Argyris and Schön (1978) identified two types of organizational level learning. The process of optimizing skills and acquiring knowledge to resolve an organizational problem is called ____________ learning.
a. Single loop b. Double loop c. Triple loop d. Problem loop