You Borrow $20,000 at an Interest Rate of 6% to Open

question 27

Multiple Choice

You borrow $20,000 at an interest rate of 6% to open Candy Dan's, a gourmet sweet shop. If the return on your investment is ________, then you will earn an economic loss.

• A) less than 6%
• B) exactly 6%
• C) greater than 6%
• D) It is indeterminate from the given information.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, which may pertain to bonds, loans, lines of credit, or other forms of debt financing.

Coup d'état

A sudden and illegal seizure of government power by a small group, often military, displacing the existing government authorities.

Constitutional Democracy

A system of government where laws and policies are made within the framework of a constitution, and the power is exercised directly or indirectly through elected representatives.

Grassroots Activities

Grassroots Activities refer to actions and initiatives taken by local, ordinary people rather than those led by political or commercial organizations, often aiming at social or political change.