Given 5 and 30 Year Loans with the Same Interest

question 43

Multiple Choice

Given 5 and 30 year loans with the same interest rate, the 30 year loan results in more of each payment being directed toward principal.

• A)True
• B)False

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Definitions:

Inventory Turnover Ratio

Indicates how many times a company's inventory is sold and replaced over a certain period, calculated by dividing cost of goods sold by average inventory.

Inventories

Raw materials, work-in-process products, and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Operating Costs

Expenses associated with the day-to-day functions of running a business, excluding capital expenditures.

Net Sales

Revenue from sales transactions after deducting returns, allowances for damaged goods, and discounts.