USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 93

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The Skalmory Corporation has entered into a three-year interest rate swap, with semiannual settlement, to pay a fixed rate of 7.5 percent per year and receive six-month LIBOR. The notional principal is $10,000,000.
-Refer to Exhibit 15.17. What is the market value of the swap to the Skalmory Corporation?

• A) -$9,000,000
• B) -$1,804,000
• C) -$87,654
• D) $91,830
• E) $7,620,000

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Definitions:

Office Expense

Costs associated with the day-to-day operations of an office, including supplies, utilities, and administrative salaries.

Insurance Expense

The cost associated with purchasing insurance policies for the business, considered an operating expense.

Postage Expense

The cost incurred by a business to send mail or packages, recorded as an expense in the business's financial statements.

Petty Cash Account

A small amount of cash kept on hand within a business for minor, routine expenses.