On April 1, the Unpaid Balance in an Account Was

question 26

Multiple Choice

On April 1, the unpaid balance in an account was $174. A payment of $70 was made on April 8. On April 26 a $26 purchase was made. The interest rate per month was 1.75% per month of the average daily balance. Find the new balance at the end of April.

• A) $132.18
• B) $106.11
• C) $176.11
• D) $131.75

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Definitions:

Cash Operating Expenses

Expenses that a company incurs during its day-to-day operations that require cash outflow.

After-Tax Discount Rate

The net discount rate that takes into account the tax implications affecting the net cost of investments or capital projects.

Working Capital

Working capital refers to the difference between a company's current assets and current liabilities. It is an indicator of a company's operational liquidity and short-term financial health.

After-Tax Discount Rate

A discount rate that has been adjusted to reflect the impact of taxes.