A residential neighborhood suffers economic obsolescence from which of the following?
a. Functional inadequacies.
b. Airplanes landing at a nearby local airport.
c. Physical wear and tear.
d. Obsolete heating and cooling systems.
Answer: b. Airplanes landing at a nearby local airport.
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One of your clients recently upgraded its accounting system from a medium-scale general ledger package to a complex state-of-the-art enterprise resource planning system. This installation took place over the last nine months of the entity's fiscal year and is nearly 100% complete by the balance sheet date. Which of the following best describes the main affect of this event on the audit risk model for the current year?
A) It will likely increase the risk of material misstatement. B) It will likely decrease the risk of material misstatement. C) It will likely decrease the audit risk. D) It will likely increase the detection risk.
A 10-year bond with a $1,000 face value and 6% coupon rate is currently selling in the bond market for $1,200. Its current yield is
A) 5%. B) 6%. C) 8%. D) 10%.