Which of the Following Statements Is FALSE

question 110

Multiple Choice

Which of the following statements is FALSE?

• A)The principal or face value of a bond is the notional amount we use to compute the interest payments.
• B)Payments are made on bonds until a final repayment date,called the term date of the bond.
• C)The coupon rate of a bond is set by the issuer and stated on the bond certificate.
• D)The promised interest payments of a bond are called coupons.

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, used for managing liquidity and ensuring financial stability.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its credit sales by dividing net credit sales by average accounts receivable.

Payables Deferral Period

The average time between the purchase of goods or services by a company and the payment of this outstanding money to its suppliers.

Cash Conversion Cycle

The length of time between the firm’s actual cash expenditures on productive resources (materials and labour) and its own cash receipts from the sale of products (i.e., the length of time between paying for labour and materials and collecting on receivables). Thus, the cash conversion cycle equals the length of time the firm has funds tied up in current assets.