When You Purchased a Car, You Borrowed $20,000 from the Bank

question 100

Multiple Choice

When you purchased a car, you borrowed $20,000 from the bank at 9.20% and agreed to make monthly payments for 3 years. What is your monthly payment?

• A) $153.33
• B) $637.86
• C) $584.12
• D) $559.78

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Definitions:

Sunk Cost

Costs that have already been incurred and cannot be recovered or changed, and thus should not affect future business decisions.

Salvage Value

The anticipated residual value of an asset after it has been fully depreciated and is no longer in use.

Net Working Capital

The variance between a corporation's current assets and its current debts, highlighting its short-term financial status.

Operating Cash Flow

Operating Cash Flow is the cash generated from the normal operations of a business, reflecting its ability to generate sufficient positive cash flow to maintain and grow its operations.