The most widely used depreciation method is

A) straight-line
B) sum-of-the-years-digits
C) declining-balance
D) units-of-production


A

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Cash flow from investing activities includes

a. cash purchases of property, plant, and equipment. b. cash sales of marketable securities and investments in securities. c. cash sales of property, plant, and equipment. d. cash sales of intangibles. e. all of the above

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Assuming all else is constant, which of the following statements is CORRECT?

A. Other things held constant, a 20-year zero coupon bond has more reinvestment risk than a 20-year coupon bond. B. Other things held constant, for any given maturity, a 1.0 percentage point decrease in the market interest rate would cause a smaller dollar capital gain than the capital loss stemming from a 1.0 percentage point increase in the interest rate. C. From a corporate borrower's point of view, interest paid on bonds is not tax-deductible. D. Other things held constant, price sensitivity as measured by the percentage change in price due to a given change in the required rate of return decreases as a bond's maturity increases. E. For a bond of any maturity, a 1.0 percentage point increase in the market interest rate (rd) causes a larger dollar capital loss than the capital gain stemming from a 1.0 percentage point decrease in the interest rate.

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Kelly wrote a check to Trish, which Trish immediately changed from $20 to $120. She negotiated the check to Carl for value, who in turn took it to Kelly's bank for certification. Kelly's bank checked his account and certified the check since there were sufficient funds to cover the check. Thereafter, Carl gave the check to Central Motors (CM) as part of the down payment for his car. CM presents

the check to Kelly's bank for payment and they discover the alteration. What consequence? A) Bank can sue CM for breach of presentment warranty of no alteration. B) Bank can charge Carl's account for $120. C) Bank can refuse to pay CM more than $20. D) Bank must pay CM $120 and cannot sue them for breach of warranty.

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Indicate whether the statement is true or false

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