Suppose an Investor Purchases a 91 Days Treasury Bill with a Face

question 53

Multiple Choice

Suppose an investor purchases a 91 days Treasury bill with a face value of ?2,00,000 for ?1,92,000. By holding the bill until the maturity date, the investor receives ?2,00,000. What is the amount of interest received by him?

• A)?8,000
• B)?80,000
• C)?3,92,000
• D)?2,00,000

Determine the impact of various transactions on cash flows from financing and investing activities.

Utilize financial information to calculate cash flow ratios and evaluate company performance.

Prepare a complete statement of cash flows for a given period using the indirect method.

Understand the relevance of the statement of cash flows to financial analysis and decision-making.

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Definitions:

Purchase Agreement

A legal document outlining the terms and conditions under which a sale is made, including details of the buyer, seller, property, and price.

Purchasing Mistakes

Errors or poor decisions made during the process of buying goods or services.

Narcotics

Drugs that dull the senses, relieve pain, and can cause deep sleep or a state of insensibility, often used medically but subject to abuse.

Locked Cabinet

A secure storage unit with a lock mechanism used to prevent unauthorized access, often for safety or security.