Utilizing Serial Bonds to Raise Long Term Resources Is Preferred

question 54

Multiple Choice

Utilizing serial bonds to raise long term resources is preferred in debt service funds because:

• A)​the face value becomes due at one time at a more distant maturity date.
• B)​serial bonds do not require a substantial accumulation of money in a sinking fund.
• C)​it assists in the budgeting process.
• D)the primary function is to account for fixed asset acquisitions.​

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Definitions:

Marginal Rate

The marginal rate typically refers to the rate at which the next dollar of taxable income is taxed.

Substitution

The economic principle that as the price of a good or service increases, consumers are likely to replace it with a cheaper alternative.

Consumer

An individual or group that purchases goods and services for personal use.

Indifference Curves

A graphical representation showing combinations of two goods that give a consumer equal satisfaction and utility, reflecting preferences.