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Assume That You Borrow $2,000 at 10% Annual Interest to Finance

question 85

Multiple Choice

Assume that you borrow $2,000 at 10% annual interest to finance a new business project. For this loan to be profitable,the minimum amount this project must generate in annual earnings is


Definitions:

Net Working Capital

Net working capital is the difference between a company's current assets and current liabilities, indicating its short-term liquidity and ability to cover short-term obligations.

Drainage Pond

An artificial or natural pond designed to collect and retain stormwater or runoff, helping to manage excess water and prevent flooding.

Accounts Receivables

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health of the company.

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