Consider the following scenario when answering the next five questions. Your friend Kevin is starting a cider brewery in Colorado Springs. Because his business is new and risky, he is unable to obtain a loan from the local bank. You agree to pay a price of $20,000 for a bond from Kevin. You will receive $22,000 in repayment exactly one year from now. The face value of the bond mentioned in the scenario is equal to O $42,000 O None of these are correct $22,000 O $2,000 $20,000

Consider the following scenario when answering the next five questions. Your friend Kevin is starting a cider brewery in Colorado Springs. Because his business is new and risky, he is unable to obtain a loan from the local bank. You agree to pay a price of $20,000 for a bond from Kevin. You will receive $22,000 in repayment exactly one year from now. The face value of the bond mentioned in the scenario is equal to O $42,000 O None of these are correct $22,000 O $2,000 $20,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following scenario when answering the next five questions. Your friend Kevin is starting a cider brewery in Colorado Springs. Because his business is new and risky, he is unable to obtain a loan from the local bank. You agree to pay a price of $20,000 for a bond from Kevin. You will receive $22,000 in repayment exactly one year from now. The dollar price of the bond mentioned in the scenario is equal to O $22,000 O $42,000 O $2,000 $20,000
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