Which of the following transactions would require the use of the present value of an annuity due concept in order to calculate the present value of the asset obtained or liability owed at the date of incurrence?
a. A capital lease is entered into with the initial lease payment due upon the signing of the lease agreement.
b. A capital lease is entered into with the initial lease payment due one month subsequent to the signing of the lease agreement.
c. A ten-year 8% bond is issued on January 2 with interest payable semiannually on July 1 and January 1 yielding 7%.
d. A ten-year 8% bond is issued on January 2 with interest payable semiannually on July 1 and January 1 yielding 9%.
Ans: a. A capital lease is entered into with the initial lease payment due upon the signing of the lease agreement.
You might also like to view...
All of the following are reasons for the importance of forecasting and budgeting, EXCEPT:
A. requires the organization to think about what is happening in the markets B. sets specific strategic objectives for the various divisions and departments within the organization C. sets specific operational parameters for the various divisions and departments within the organization D. requires managers to make decisions related to resource allocation, when measured against specific outcomes E. become benchmarks/targets against which actual results can be measured
All of the following are mentioned in the text as indicators that should be used to evaluate interviewers on the quality of interviewing EXCEPT:
A) the answers to unstructured questions are summarized. B) for structured questions, item nonresponse occurs infrequently. C) the recorded data are legible. D) all instructions, including skip patterns, are followed. E) A and B