Author Question: Bonds are ________. A) a series of perpetual short-term debt instruments B) a form of equity ... (Read 57 times)

jake · **on:** Jul 11, 2018

Bonds are ________.

A) a series of perpetual short-term debt instruments
B) a form of equity financing that pays interest
C) long-term debt instruments used to raise large sums of money
D) a hybrid form of financing used to raise large sums of money from a diverse group of lenders

Question 2

A corporation has decided to replace an existing asset with a newer model. Two years ago, the existing asset originally cost 70,000 and was being depreciated under MACRS using a five-year recovery period. The existing asset can be sold for 30,000.

The new asset will cost 80,000 and will also be depreciated under MACRS using a five-year recovery period. If the assumed tax rate is 40 percent on ordinary income and capital gains, the initial investment is ________.
A) 48,560
B) 44,360
C) 49,240
D) 27,600