What happens if a bond is issued at a premium?
If bonds were issued at a premium, taxpayers must amortize the premium over the life of the bond resulting in an increase in interest income. Rationale: The amortization of the premium would result in a decrease to interest income. If bonds were issued at a discount, special original issue discount rules apply.
Is interest paid on a bond included in gross income?
The actual interest payments received are included in gross income. If bonds are purchased at a premium in the secondary market, the premium can be amortized or added to the basis of the bond. If bonds are purchased at a discount in the secondary market, the discount is amortized over the remaining life of the bond.
What are some examples of primary activities that add value directly to the value chain?
Accounting, human resources, and research and development (R&D) are examples of primary activities that add value directly to the value chain. False. Accounting, human resources, and research and development are examples of. support activities that add value indirectly.
Who owns Green Plus Hotels?
The Konex Hotel Group purchased Green-Plus Hotels for an estimated value of $120 billion. All the hotels previously owned by Green-Plus Hotels are now managed by the Konex Hotel Group and are known as Konex hotels.
Does a firm create value if its return on invested capital is less than the cost of capital?
True. Generally speaking, a firm will create value if its return on invested capital (ROIC) is less than the cost of capital. False. As a rule of thumb, if a firm's ROIC is greater than its cost of capital. it generates value; if it is less than the cost of capital, the firm destroys value.