Assuming Use of the Step-Down Method,over How Many Square Feet

question 37

Multiple Choice

Assuming use of the step-down method,over how many square feet would the Building Maintenance cost be allocated (i.e. ,spread) ?

• A)18,000.
• B)48,000.
• C)55,000.
• D)66,000.
• E)More information is needed to judgE.

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Definitions:

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often used as an indication of interest rate risk.

Coupon Bond

A type of bond that pays the holder a fixed interest rate (the coupon) at regular intervals until the bond matures, when the principal amount is repaid.

Zero-Coupon Bond

A debt security that doesn't pay interest (a coupon) but is traded at a deep discount, offering profit at maturity when the bond is redeemed for its full face value.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates.