If r is the discount rate, the formula [1/(1+r)] refers to the
a. present value interest factor associated with r for one period.
b. future value interest factor for an annuity with a duration of r periods.
c. present value for some future cash flows.
d. future value interest factor associated with r for one period.
a
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Explain how level of authority affects leaders' and followers' behavior.
What will be an ideal response?
Barbara, an antique dealer, intentionally misrepresents the value of an antique chest of drawers, as $6,000 when she has reason to know the value is considerably less. Margaret agrees to buy it for $5,500 . It is worth $2,500 . In a state that uses the "out-of-pocket" rule, Margaret's damage award would be:
a. $3,500. b. $3,000. c. $500. d. $2,500.
Which of the following situations suggests the acceptance of an investment proposal?
A) The present value of the net cash inflows exceeds the initial investment. B) The IRR is lower than the hurdle rate. C) The cash inflows are less than the initial investment. D) The investment will have a residual value.
Spice Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Pumpkin Corporation purchased $140,000 of Spice's bonds from the original purchaser on December 31, 20X8, for $125,000. Pumpkin owns 75 percent of Spice's voting common stock.Based on the information given above, what amount of premium on bonds payable will be eliminated in the preparation of the 20X8 consolidated financial statements?
A. $2,500 B. $5,000 C. $2,800 D. $3,500