Use Estimation to Select the Best Response

question 22

Multiple Choice

Use estimation to select the best response. Do not calculate. A $147,000 30-year loan at 10% + 2 points + $100 would have a fee for points of approximately __________.

• A) $850
• B) $3,000
• C) $10,000
• D) $2,100
• E) $14,700

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Definitions:

Operational Efficiency

The ability of an organization to minimize waste and maximize outputs from given inputs, often through improvements in processes and technology.

Residual Claimants

Individuals who personally receive the excess, if any, of revenues over costs. Residual claimants gain if the firm’s costs are reduced or revenues increase.

Market Wages

The prevailing pay rates for work in a particular market or industry, determined by supply and demand dynamics.

College Graduates

Individuals who have successfully completed a degree program at a college or university.