When Purchasing Land the Costs for Clearing Draining Filling and Grading

question 80

True/False

When purchasing land the costs for clearing draining filling and grading should be charged to a Land Improvements account.

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Definitions:

Sinking Fund

Facilitates the orderly retirement of a bond issue. This can be achieved in one of two ways: the company can call in for redemption (at par value) a certain percentage of bonds each year or the company may buy the required amount of bonds on the open market.

Equilibrium

The condition under which the intrinsic value of a security is equal to its price; also, its expected return is equal to its required return.

Yield Curve

The curve that results when the yield to maturity is plotted on the y-axis with term to maturity on the x-axis.

Junk Bonds

High-risk, high-yield bonds issued to finance leveraged buyouts, mergers, or troubled companies.