The M.I.R.R. is based on a Cash flows being reinvested at a rate always different from WACC b Cash flows being reinvested at the WACC or a comparable rate. c Cash flows being reinvested at the YTM on treasury bonds. d Cash flows being reinvested at the IRR
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The M.I.R.R. is based on
|
a |
Cash flows being reinvested at a rate always different from WACC |
|
b |
Cash flows being reinvested at the WACC or a comparable rate. |
|
c |
Cash flows being reinvested at the YTM on treasury bonds. |
|
d |
Cash flows being reinvested at the IRR. |
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- Which of the following instruments has the highest cost? Seleccione una: a. Fed Funds b. Commercial Paper c. Eurodollars d. Prime rateThe Interest rate on which of the following is the LIBOR? a. Bankers' acceptances b. Repurchase agreement c. Certificate of Deposits d. Eurodollar CD1. According to PFRS 9, The amortized cost of a financial instrument is calculated using. A. The effective interest method. B. The straight line method C. A or b D. Choice a however, the straight line method can be used in some circumstances. 2. The amortization of a discount on an investment in bonds measured at amortized cost A. Increases the carrying amount of the investment B. Is the excess of interest income over interest received or receivable. C. Is recorded directly to the invesment account D. All of these 3. Which of the following statements is correct for an investment in term bonds that was acquired at a premium? A. The amortized cost of the bonds increases annually. B. The current and non current portions of the bonds as of the reporting date are reported separately. C. The interest income recognized each year is higher than the amount of interest received/ receivable. D. The effective interest rate is lower than the stated rate of the bonds. 4. The rate…
- .Bonds are issued at face value when: Effective rate is higher than stated rate Effective rate is lower than stated rate Cash proceeds is equal to face value Cash proceeds is not equal to face valueWhat is the effective interest rate of a bond or other debt instrument measured at amortized cost? Select the correct response: The interest rate currently charged by the entity or by others for similar debt instruments (i.e., similar remaining maturity, cash flow pattern, currency, credit risk, collateral, and interest basis). The interest rate that exactly discounts estimated future cash payments or receipts through the expected life of the debt instrument or, when appropriate, a shorter period to the net carrying amount of the instrument. The basic, risk-free interest rate that is derived from observable government bond prices The stated coupon rate of the debt instrument.he interest rate used to calculate the present value of a bond's cash flows is often referred to as the:Group of answer choices dividend rate. discount rate. multiplier. yield to maturity
- The market interest rate... Select the word list below: is the contractual interest rate used to determine the amount of cash interest the borrower. is listed by the bond indenture. is the rate investors demand for loaning funds Answer is the rate investors demand for loaning funds paid byWhich of the following is an example of long term instruments? (select all that apply) a. Asset backed securities b. Commercial paper С. Repo d. Treasury billFrom page 9-3 of the VLN, what are the cash flows from a bond that must be present valued back to today? Group of answer choices A. The face amount only B. The interest payments only C. The issue price only D. The face amount and interest payments
- Which of the following is an example of a money market instrument? (Select all that apply) a. 2-year Treasury Bond b. Certificate of Deposit C. Swap d. Stop-callThe interest rate on debt, r, is equal to the real risk-free rate plus an inflation premium plus a default risk premium plus a liquidity premium plus a maturity risk premium. The interest rate on debt, r, is also equal to the -Select-purerealnominalCorrect 1 of Item 1 risk-free rate plus a default risk premium plus a liquidity premium plus a maturity risk premium.The real risk-free rate of interest may be thought of as the interest rate on -Select-long-termshort-termintermediate-termCorrect 2 of Item 1 U.S. Treasury securities in an inflation-free world. A Treasury Inflation Protected Security (TIPS) is free of most risks, and its value increases with inflation. Short-term TIPS are free of default, maturity, and liquidity risks and of risk due to changes in the general level of interest rates. However, they are not free of changes in the real rate. Our definition of the risk-free rate assumes that, despite the recent downgrade, Treasury securities have no meaningful default risk.The…Hello! I need help with the following accounting problem where we have to compute the total cost of borrowing for the bonds based on the info attatched. Thank you!