What Amortization Payment Would You Need to Make Each Year

question 93

Multiple Choice

What amortization payment would you need to make each year, at 12% interest compounded annually, to pay off a loan of $4,000 in 6 years? (Use Table 12-2 from your text)

• A) $477.11
• B) $486.45
• C) $972.90
• D) $954.22

Distinguish between direct and indirect methods for calculating cash flows from operating activities.

Analyze the impact of changes in balance sheet accounts on cash flows.

Compute cash flows associated with the sale or purchase of plant assets.

Calculate depreciation and its effect on cash flow from operating activities.

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Definitions:

Marginal Revenue (MR)

The additional revenue that a firm gains from selling one more unit of a good or service.

Inelastic Segment

A portion of the demand curve where the price elasticity of demand is less than one, indicating consumers' insensitivity to price changes.

Total Revenue

It refers to the total receipts from sales of goods or services sold by a company during a particular period.