Sinking Fund Arrangements Are Least Apt to Contain Which One

question 34

Multiple Choice

Sinking fund arrangements are least apt to contain which one of these requirements?

• A)A deferred provision for the first few years
• B)A one-time repayment of the entire principal and interest at maturity
• C)A balloon payment
• D)Equal payments of principal over the life of the bond
• E)Sufficient payments over the bonds' life to retire the entire bond issue

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Definitions:

Sales Mix

The combination of products and services sold by a company, significantly impacting its overall profitability and performance.

Degree of Operating Leverage

A ratio that measures the sensitivity of a company's operating income to its sales, indicating how revenue growth translates to growth in operating income.

Degree of Operating Leverage

A financial metric that measures the sensitivity of a company's operating income to its sales volume.

Margin of Safety

The amount by which sales can drop before reaching the break-even point, typically expressed as a percentage of current sales.