Sam Jones Has an Engineering Firm

question 4

Multiple Choice

Sam Jones has an engineering firm. He wants to build a new headquarters building. The building will cost $1,500,000. He will put down $450,000 and have a bank finance the remainder at prime plus 2 percent. The prime lending rate is currently 8.5 percent. Sam will withdraw the money for the down payment from his mutual fund account where he has earned 13 percent for the last ten years. What percentage of the building is being equity financed?

• A) 10.5%
• B) 70%
• C) 13%
• D) 30%

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Definitions:

Maintenance

The process of preserving something’s condition or functionality through regular checkups, repairs, and necessary updates.

Massed

Pertaining to a practice schedule where tasks are performed in long, unbroken intervals without rest, contrasting with spaced practice.

Mnemonic

A device or technique used to aid memory, often through association of familiar concepts or a sequence of ideas.

Equipotentiality Hypothesis

The idea that any part of a certain brain area can carry out the functions of any other part of that area.