Answer the following statements true (T) or false (F)
1) The present value of a bond is the only price that buyers are willing to spend on the bond and the only price sellers are willing to accept for the bond.
2) Junk bonds sell for higher prices than non-junk bonds.
3) The present value of a bond is the only price that buyers are willing to spend on the bond and the only price sellers are willing to acce244) A profit-maximizing manager should always calculate the net present value and use the net present value rule to evaluate any business decision that involves the payment or receipt of money at different times in the future.pt for the bond.
4) Profit-maximizing managers should make efforts to receive profits in future and incur costs in the present.
5) Interest paid of debt-financed investments is referred to as a tax shield.
1) TRUE
2) FALSE
3) TRUE
4) FALSE
5) TRUE
You might also like to view...
A country is said to have a comparative advantage in the production of a good when it:
a. has the lower opportunity cost of producing the good. b. can produce the good using fewer resources than another country. c. requires fewer labor hours to produce the good. d. all of these.
Assuming that coffee and tea are substitutes, a decrease in the price of coffee will result in a. A leftward shift in the demand for tea
b. A downward movement along the demand curve for tea. c. A rightward shift in the demand for tea. d. An upward movement along the demand curve for tea.
Sally lost her job when her company went out of business because of a recession. This is an example of
If a Pigovian tax is levied on consumers, the demand curve will shift:
A. straight down, decreasing quantity. B. straight up, decreasing quantity. C. straight up, increasing quantity. D. straight down, increasing quantity.