Use the Table for the Question(s)below

question 99

Multiple Choice

Use the table for the question(s) below.
Consider the following prices from a McDonald's Restaurant:

-A McDonald's Big Mac value meal consists of a Big Mac sandwich,large Coke,and a large fry.Assume that there is a competitive market for McDonald's food items and that McDonald's sells the Big Mac value meal for $4.79.Does an arbitrage opportunity exists and if so how would you exploit it and how much would you make on one value meal?

• A)Yes,buy a value meal and then sell the Big Mac,Coke,and fries to make arbitrage profit of $0.68.
• B)No,no arbitrage opportunity exists.
• C)Yes,buy a Big Mac,Coke,and fries,then sell a value meal to make arbitrage profit of $1.09.
• D)Yes,buy a Big Mac,Coke,and fries,then sell a value meal to make arbitrage profit of $0.68.
• E)Yes,buy a value meal and then sell the Big Mac,Coke,and fries to make arbitrage profit of $1.09.

Comprehend the journal entry recording for bond reacquisition and its impact on financial statements.

Identify and apply the correct methods of amortization for bond discounts or premiums.

Distinguish between the book value and market value methods of accounting for convertible bonds and their impact on financial statements.

Recognize the significance and accounting treatment of the issuance of bonds with detachable stock warrants.

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Definitions:

CD-R

Short for Compact Disc-Recordable, a type of digital storage medium that allows users to record data once, but prevents erasing and re-recording of data.

Computer Burner

A device, typically part of a computer, used for recording data onto optical discs such as CDs, DVDs, or Blu-ray discs.

USB Flash Drive

A portable storage device using flash memory for storing data, easily connected to computers and other devices via USB ports.

Portable Memory Card

A small, removable storage device used to save data from digital devices, such as cameras and smartphones, allowing easy transfer between devices.