The Risk of Making a Loan Is

question 202

Multiple Choice

The risk of making a loan is

• A) called "default risk" when taxes are not paid.
• B) the risk that lender does not pay.
• C) the risk that the borrower does not pay.
• D) earning profits that are too high and cause higher taxes.

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Definitions:

Forming Department

A division or section within a manufacturing plant where a specific, dedicated portion of the production process occurs, focusing on shaping or forming materials into parts or products.

Assembly Department

A sector within a manufacturing facility where individual components are assembled into final products.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, calculated before the start of a period based on estimated costs and activity levels.

Direct Labor-Hours

The total hours worked by employees that are directly involved in the production process, used as a basis for allocating labor costs to products.