If $2,500,000 of Bonds Are Issued During the Year but $4,000,000

question 168

Multiple Choice

If $2,500,000 of bonds are issued during the year but $4,000,000 of old bonds are retired during the year, the statement of cash flows will show a(n)

• A)net increase in cash of $1,500,000.
• B)net decrease in cash of $1,500,000.
• C)increase in cash of $2,500,000 and a decrease in cash of $4,000,000.
• D)net loss on retirement of bonds of $1,500,000.

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Definitions:

Buyer And Seller

Individuals or entities involved in the transaction of goods or services, where the buyer acquires these from the seller in exchange for money.

Terminal Value

An estimate of a company's value at the end of a specific period, often used in discounted cash flow analysis to calculate the present value of all future cash flows.

Future Cash Flows

Future cash flows refer to the projected streams of revenue or expenses expected to be generated or incurred by a business or investment over time.

Current Value

The present worth of an asset or company, considering its financial standing, market condition, and other factors influencing its valuation at the current time.