答案和详解如下： Q6. A long-term bond is sold at a discount. In subsequent years cash flow from operations will be:
A) properly stated. B) understated. C) overstated. Correct answer is C) Cash interest is only part of the interest expense. The amortization of the bond discount at maturity is charged to financing cash flow when in fact it should be charged against cash flow from operations, so CFO will be overstated. Q7. Which of the following statements regarding the issuance of bonds is most accurate? Compared to bonds issued at par, bonds issued at a: A) premium will have overstated cash flows from operations (CFO). B) discount will have overstated cash flows from financing (CFF). C) discount will have overstated cash flows from operations (CFO). Correct answer is C) Bonds issued at discount will have more cash flows from operations and less cash flows from financing. Thus, CFO is overstated and CFF is understated. Bonds issued at a premium will have overstated CFF and understated CFO. Q8. A company issued an annual-pay bond with the following characteristics: Face value | $67,831 | Maturity | 4 years | Coupon | 7% | Market interest rates | 8% |
What is the present value of the interest payments on the date when the bonds are issued? A) $15,726. B) $49,857. C) $65,582. Correct answer is A) Present value of the interest payments on the date of issue is $15,726. I/Y = 8.00%; N = 4; PMT = $4,748.17 ($67,831 × 0.07 ); FV = $0; CPT → PV. Q9. What is the unamortized discount on the date when the bonds are issued? A) $15,729. B) $1,748. C) $2,249. Correct answer is C) The unamortized discount at the time bonds are issued will be $2,249.
Face value of bonds = $67,831
Proceeds from bond sale = $65,582 [I/Y = 8.00%; N = 4; PMT = $4,748.17 ($67,831 × 0.07); FV = $67,831; CPT → PV]
Unamortized discount = $2,249 ($67,831 − $65,582) Q10. What is the unamortized discount at the end of the first year? A) $1,750. B) $538. C) $1,209. Correct answer is A)
The unamortized discount will decrease by $499 at the end of first year and will be $1,750.
Interest expense = $5,247 ($65,582 × 0.08)
Coupon payment = $4,748 ($67,831 × 0.07)
Change in discount = $499 ($5,247 − $4,748)
Discount at the end of first year = $1,750 ($2,249 − $499) Q11. Which of the following statements regarding the issuance of a discount bond is most accurate? A) The cash from investing (CFI) is increased by the amount of the proceeds. B) The cash from financing (CFF) is increased by the amount of the proceeds. C) The cash from operations (CFO) is understated. Correct answer is B) The cash from financing (CFF) is increased by the amount of the proceeds. The cash from operations (CFO) is overstated because it will not include the amortization of the discount, which increases interest expense. There is no effect on CFI. | 
发表于 2009-1-19 11:18
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