Assume That a Machine with a Cost of $3000 Has

question 20

Multiple Choice

Assume that a machine with a cost of $3000 has accumulated depreciation of $1400 on the date of its disposal.If it was traded-in for $2000 on a new machine and the balance of $1500 was paid in cash what is the profit or loss on disposal of the old machine? Ignore GST.

• A)$1000 loss
• B)$600 gain
• C)$400 gain
• D)$1200 loss

Calculate the intrinsic value of a bond given its yield to maturity and coupon rate.

Define structured financial instruments and their purposes, including CDOs, SIVs, and CDSs.

Understand the function and operation of Structured Investment Vehicles (SIVs) and their role in the financial markets.

Comprehend the structure and underlying assets of Mortgage-backed Collateralized Debt Obligations (CDOs).

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Definitions:

Capital Stock

The total amount of physical, financial, and human assets used in the production of goods and services in an economy.

Proprietorships

Businesses owned and operated by a single individual, bearing full responsibility for its assets and liabilities.

Partnerships

A business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

Net Investment

The total amount spent by a company or economy on capital assets, minus depreciation, reflecting the increase in value of the entity's productive capacity.