The Balances of Select Accounts of McCarthy Company as of December

question 50

Multiple Choice

The balances of select accounts of McCarthy Company as of December 31,2016 are given below:

The Unearned Revenue is the amount of cash received for services to be rendered in January 2017.Interest Payable will be paid on February 5,2017.What are the total long-term liabilities shown on the balance sheet?

• A)$1,300
• B)$5,000
• C)$5,400
• D)$21,000

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Definitions:

Cost of Debt

The effective rate that a company pays on its total debt, representing the interest expense on outstanding debt.

WACC

The weighted average cost of capital, a calculation that reflects the average rate of return a company is expected to pay its security holders to finance its assets.

Riskier

Describing an option or investment with a higher level of uncertainty or potential for loss.

WACC

Stands for Weighted Average Cost of Capital, a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.