Which of the following would most likely indicate the existence of related parties?
A) Failing to write down inventory to market value just before year-end.
B) Depending on one or a few products for nearly all of a firm's operating revenues.
C) Borrowing money at an interest rate substantially below the prevailing market rate of interest.
D) Selling goods to a major customer of your main competitor.
Answer: C) Borrowing money at an interest rate substantially below the prevailing market rate of interest.
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Maywood, Inc. signs a $11,000, 8.5%, six-month note dated November 1, 2017. The interest expense recorded for this note in 2017 will be ________
A) $935 B) $156 C) $468 D) $312
Time value of money is important because
A) you do not want to wait a long time to get paid. B) deflation eats away at the value of a dollar. C) the present value of future cash flows is affected by inflation. D) time value of money is not as important to a person's finances as budgeting.