In return for promising to make future payments, a firm receives cash or other assets with a measurable cash-equivalent value. The firm records a long-term liability for that amount and the book value of that borrowing at any time equals the
a. future value of all the then-remaining promised payments using the historical market interest rate applicable at the time the firm originally incurred the liability.
b. current value of all the then-remaining promised payments using the historical market interest rate applicable at the time the firm originally incurred the liability.
c. present value of all the then-remaining promised payments using the market interest rate applicable at the current time.
d. present value of all the then-remaining promised payments using the historical market interest rate applicable at the time the firm originally incurred the liability.
e. future value of all the then-remaining promised payments using the using the market interest rate applicable at the current time.
D
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Which of the following sentences best introduces a graph in a written report?
a. Fewer than three percent of the branch managers complained of long working hours, as shown in Figure 7. b. Figure 7 is shown below. c. Figure 7 shows the response of managers about working hours. d. See Figure 7 for details about manager attitudes.
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What will be an ideal response?
Which of the following statements regarding a 20-year monthly payment amortized mortgage with a nominal interest rate of 10% is CORRECT?
A. Exactly 10% of the first monthly payment represents interest. B. The monthly payments will increase over time. C. A larger proportion of the first monthly payment will be interest, and a smaller proportion will be principal, than for the last monthly payment. D. The total dollar amount of interest being paid off each month gets larger as the loan approaches maturity. E. The amount representing interest in the first payment would be higher if the nominal interest rate were 7% rather than 10%.