Calhoun County Has a Principal and Interest Payment Due in the Following

question 43

Multiple Choice

Calhoun County has a principal and interest payment due in the following fiscal year. However, the county Debt Service Fund has the cash necessary to make the payment in the current fiscal year. Assuming all other requirements have been met and the county plans to make the payment next year, at what point must the principal and interest payment come due in the next year to recognize the expenditure in the current fiscal year?

• A) The principal and interest payment must be due before the end of the next fiscal year.
• B) The principal and interest payment must come due not later than the end of the first quarter of next fiscal year.
• C) The principal and interest payment must come due no later than the first 60 days of the next fiscal year.
• D) The principal and interest payment must come due not later than one month into the next fiscal year.

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Definitions:

Crossover Rate

The discount rate at which two investment projects have the same Net Present Value (NPV), often used in capital budgeting.

Projects

Specific tasks or initiatives undertaken to achieve a particular goal, often requiring a significant amount of planning and work.

IRR Cross-Over Rate

The rate at which two projects have the same net present value (NPV) when considering their internal rate of return (IRR), used to choose between competing projects.

Annual Cash Flow

The total amount of money being transferred into and out of a business, measured yearly.