In a defined benefit pension plan:
A. Pension expense and the amount funded each period must be the same.
B. No promise is made concerning the ultimate benefits to be paid to the employees.
C. The employer assumes the majority of the investment risk.
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Use the following data to answer Questions 1 through 8.
Firm issues a $10 million bond with a 6% coupon rate, 4-year maturity, and annual interest payments when market interest rates are 7%.
FUse the following data to answer Questions 1 through 8.
Firm issues a $10 million bond with a 6% coupon rate, 4-year maturity, and annual interest payments when market interest rates are 7%.
F
An increase.
B. A decrease.
C. No change.
An increase in the tax rate causes the balance sheet value of a deferred tax asset to:
A. decrease.
B. increase.
C. Remain unchanged.
According to U.S. GAAP, the coupon payment on a bond is:
A. Reported as an operating cash outflow.
B. Reported as a financing cash outflow.
C. Reported as part operating cash outflow and part financing cash outflow.
Issuing bonds would be classified as:
A. Investing cash flow.
B. Financing cash flow.
C. No cash flow impact.