What is a trade acceptance?
What will be an ideal response?
A trade acceptance or bill of exchange is a sight draft that arises when credit is extended by the seller to the buyer with the sale of goods. With this type of draft, the seller is both the drawer and the payee. The buyer to whom credit is extended is the drawee. Even though only two actual parties are involved, it is considered a three-party instrument because three legal positions are involved. A trade acceptance is not countersigned by the drawee's bank, so it is only as good as the buyer-drawee's creditworthiness.
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Which of the following is correct?
a. check digits should be used for all data codes b. check digits are always placed at the end of a data code c. check digits do not affect processing efficiency d. check digits are designed to detect transcription and transposition errors
Jasper makes a $45,000, 90-day, 6.5% cash loan to Clayborn Co. The amount of interest that Jasper will collect on the loan is: (Use 360 days a year.)
A. $243.75. B. $2925. C. $1462.50. D. $32.50. E. $731.25.
Which of the following statements applies to the capital asset pricing model?
a. It assumes that individual securities are priced solely on unsystematic risk. b. It uses beta to represent unsystematic risk of individual securities. c. It assumes that if the rate of return on an individual security is greater than the market average, systematic risk of the security must be smaller. d. It assumes that if beta equals 1, the systematic risk of an individual security is equal to the average risk of the market as a whole.
Ryner Corporation is considering three investment projects: S, T, and U. Project S would require an investment of $20,000, Project T of $69,000, and Project U of $83,000. No other cash outflows would be involved. The present value of the cash inflows would be $23,200 for Project S, $77,970 for Project T, and $94,620 for Project U. Rank the projects according to the profitability index, from most profitable to least profitable. (Ignore income taxes.)
A. U, S, T B. U, T, S C. S, U, T D. T, S, U