If $1,000,000 of 10% Bonds Are Issued at 98 3/4,the

question 60

Multiple Choice

If $1,000,000 of 10% bonds are issued at 98 3/4,the amount of cash received from the sale is

• A)$980,000.
• B)$975,000.
• C)$987,500.
• D)$1,000,000.

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Definitions:

Return on Investment

A measure of the profitability of an investment expressed as a percentage of the initial amount invested.

Turnover

The rate at which inventory or assets are replaced over a given period, or alternatively, the total amount of a company's sales or revenues.

Net Operating Income

The total profit of a company after operating expenses are subtracted, but before taxes and interest are deducted.

Average Operating Assets

The average value of the assets involved or used in the operating activities of a company over a given period, typically calculated as the average of the opening and closing balances of these assets.