Scenario 13-2 Joe Wants to Start His Own Business.The Business He Wants

question 145

Multiple Choice

Scenario 13-2
Joe wants to start his own business.The business he wants to start will require that he purchase a factory that costs $500,000.To finance this purchase, he will use $200,000 of his own money, on which he has been earning 10 percent interest per year.In addition, he will borrow $300,000, and he will pay 12 percent interest per year on that loan.
-Refer to Scenario 13-2.For the first year of operation,what is the explicit cost of purchasing the factory

• A)$12,000
• B)$20,000
• C)$36,000
• D)$44,000

Understand the influence of family and organizational culture on work behavior.

Acknowledge the significance of group membership, interpersonal skills, and trust in professional settings.

Discuss the concepts of organizational culture and its uniqueness.

Comprehend the relationship between personal issues and professional performance.

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Definitions:

Compounded

The method of calculating interest where the accumulated interest is added back to the principal sum, so that interest in the next period is then earned on the principal plus previously accumulated interest.

Principal

The original amount of money invested or loaned, before interest.

Compounded

The process of calculating interest on both the initial principal and the accumulated interest from previous periods.

Semi-annually

Occurring twice a year or every six months.