Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use a financial calculator or Excel)
A) $102,323.
B) $84,557.
C) $104,376.
D) $100,000.
Answer: C
The balance sheet of Sub America reports total assets of $400,000 and $450,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%. What is Sub America's net income for the year?
A) $42,500.
B) $45,000.
C) $4,250,000.
D) $85,000.
Answer: A
A company's balance sheet reports stockholders' equity of $800,000. The debt to equity ratio is 2.5. What is the amount of the company's total liabilities?
A) $2,000,000
B) $320,000
C) $1,000,000
D) $800,000
Answer: A
