答案和详解如下： 35．For a given amount of financing, issuing which of the following bonds will result in the largest misstatement in cash flow from operations (CFO)? A) Convertible bond. B) Premium bond. C) Discount bond. D) Zero-coupon bond. The correct answer was D) The zero-coupon bond will most likely cause cash from operations to be overstated by the greatest degree. This is because they pay no cash interest during the life of the bond and the entire amount of the interest expense is derived from amortizing the discount of the bond.
36．A company sells a long-term, zero-coupon bond. In subsequent years, the company’s cash flow from operations will be: A) overstated. B) understated. C) properly stated. D) initially understated and then become properly stated. The correct answer was A) Cash flow from operations (CFO) is systematically “overstated” when a zero-coupon bond is issued because the interest on a zero-coupon bond never reduces operating cash flow. The amortization of the bond discount at maturity is charged to financing cash flow when, in fact, it should be charged against CFO. Thus, CFO will be overstated.
37．Which of the following statements regarding the issuance of bonds is TRUE? Bonds issued at a: A) discount will have overstated cash flows from financing (CFF). B) premium will have overstated cash flows from operations (CFO). C) discount will have overstated cash flows from operations (CFO). D) premium will have understated cash flows from financing (CFF). The correct answer was A) 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.
38．A zero coupon bond, compared to a bond issued at par, will have higher: A) cash flows from operations (CFO). B) interest expense. C) debt at the end of the year. D) cash flows from financing (CFF). The correct answer was A) The zero-coupon bond will have higher cash flows from operations, as the cash interest expense in this case is zero and no cash is paid until maturity. Candidates should remember that any bond issued at a discount will have more cash flow from operations and less cash flow from financing.
39．For a given par value, which of the following debt issues will have the highest cash flows from financing? A) Bonds issued at par. B) Bonds issued at discount. C) Zero-coupon bond. D) Bonds issued at premium. The correct answer was D) The bonds issued at premium will have the highest cash flows from financing, while bonds issued at par will have higher cash flows from financing than bonds issued at a discount. Candidates should remember that any bond issued at a premium will have more cash flow from financing and less cash flow from operations.
40．Which of the following statements regarding zero-coupon bonds is TRUE? A) Interest expense is a combination of operating and financing cash flows. B) A company should initially record zero-coupon bonds at their discounted present value. C) The interest expense in each period is found by applying the discount rate to the book value of debt at the end of the period. D) The discount rate used to value the bond is the average current bond market interest rate. The correct answer was B) Zero coupon bonds sell at a discount, interest expense is found by applying the discount rate to the book value of debt at the beginning of the period, there is no deduction from cash flow from operations for a zero coupon bond, and the discount rate used to value the bond is the company's normal borrowing rate. | 
发表于 2008-4-18 17:44
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