Blair Scott Started a Sole Proprietorship by Depositing $75,000 Cash

question 46

Multiple Choice

Blair Scott started a sole proprietorship by depositing $75,000 cash in a business checking account.During the accounting period the business borrowed $30,000 from a bank,earned $18,000 of net income,and Scott withdrew $12,000 cash from the business.Based on this information,at the end of the accounting period Scott's capital account contained a balance of:

• A)$93,000.
• B)$111,000.
• C)$72,000.
• D)$81,000.

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Definitions:

Free Cash Flow

Cash generated by a company's operations minus capital expenditures, indicating the amount of cash a company can distribute to shareholders or reinvest.

Net Debt

The total debt of a company minus its cash and cash equivalents, indicating the actual debt burden on the company.

Cost of Equity

The return that a company requires to decide if an investment meets capital return requirements and is often used in financial modeling for valuing a company.

Market Capitalization Rate

The expected rate of return on a portfolio consisting of all publicly traded securities, weighted by market capitalization.