A Long Term Promissory Notes for $20 000 Is Signed

question 15

Multiple Choice

A long term promissory notes for $20 000 is signed on April 15,2010.It is due on October 15,2013 at j₂ = 6%.The maturity value of the note is $24 597.48.The note is sold on April 15,2011 to a bank that discounts the note at j₄ = 8%.What are the proceeds?

• A)$21,218.00
• B)$20,582.07
• C)$20,292.30
• D)$20,178.50

Identify and differentiate between types of financial ratios such as liquidity, activity, leverage, and profitability ratios.

Apply financial ratio analysis for assessing a firm’s short-term solvency through liquidity ratios.

Utilize financial ratios to evaluate a firm's efficiency in asset management through activity ratios.

Assess a firm’s long-term solvency through leverage ratios.

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Definitions:

LIFO Reserve

The difference between the cost of inventory calculated under the Last In, First Out (LIFO) method and its cost under the First In, First Out (FIFO) method.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including the cost of the materials and labor directly used to create the product.

FIFO Costs

First In, First Out, a cost flow assumption for inventory valuation where the oldest inventory items are recorded as sold first.

FIFO Inventory

A method of inventory valuation where the first items placed into inventory are the first ones sold; stands for First-In, First-Out.