Tyler Is Looking for an Investment That Will Pay a Little

question 245

True/False

Tyler is looking for an investment that will pay a little better than what he can get from a government bond. You suggest that he consider a new issue of debenture bonds by Very Vegetarian that pay 8.5% annually. You explain that Very Vegetarian has operated for a long time, and the debenture feature makes these bonds more secure than others.

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Definitions:

Assets

Resources owned by a business with future economic benefits.

Investments

The balance sheet caption used to report long-term investments in stocks not intended as a source of cash in the normal operations of the business.

Cash

Money in the form of currency or coins, readily available for transactions.

Prepaid Expenses

Expenses paid in advance for a benefit yet to be received, recorded as assets on the balance sheet.