Use the Information Below to Answer the Following Questions

question 18

Multiple Choice

Use the information below to answer the following questions:
Assume that on 1 January 2012 the company issued $100 000 ten-year bonds with a 10% coupon rate paid semi-annually. The bond is issued to yield a 12% return to investors selling for $88 529.
-What is the interest expense for the first 6 months?

• A) $4426
• B) $5000
• C) $5312
• D) $6000.

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Definitions:

Marginal Revenue

The additional revenue that is gained from selling one more unit of a product or service.

Marginal Cost

Expenses incurred from making one more unit of a product or service.

Average Revenue

The mean amount of money earned per unit sold, calculated by dividing the total revenue by the quantity of units sold.

Marginal Revenue

The additional income gained from selling one more unit of a product.