If $250000 of Bonds Are Issued During the Year but $130000

question 102

Multiple Choice

If $250000 of bonds are issued during the year but $130000 of old bonds are retired during the year the statement of cash flows will show a(n)

• A) net increase in cash of $120000.
• B) net decrease in cash of $120000.
• C) increase in cash of $250000 and a decrease in cash of $130000.
• D) net gain on retirement of bonds of $120000.

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Definitions:

Efficient Level

A point at which resources are allocated in the most effective manner, maximizing output without wasting resources.

Excludable

A characteristic of a good or service that allows its owner to prevent others from using it without permission.

Nonrival

A characteristic of a good whereby one person's consumption does not diminish the availability of the good for consumption by others.

Marginal Social Cost

The additional cost incurred by society as a whole due to the production of one extra unit of a good or service.