A Donor Contributed $100,000 to the City Stipulating That the Money

question 12

Multiple Choice

A donor contributed $100,000 to the city stipulating that the money be invested and that the earnings thereon be used for maintenance of the city municipal swimming pool.The $100,000 would most appropriately be recorded in a(an)

• A) Agency fund.
• B) Private-purpose trust fund.
• C) Endowment fund.
• D) Permanent fund.

---

Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, including the cost of servicing debt.

Merger Incremental Cash Flow Analysis

The process of evaluating the additional cash flows a company expects to receive from a merger or acquisition.

Vertical Merger

Occurs when a company acquires another firm that is “upstream” or “downstream”; for example, an automobile manufacturer acquires a steel producer.

Petrochemical Firm

A company involved in the production of chemical products derived from petroleum and natural gas.