Jimbob Company Has Two Business Alternatives - a & B

question 29

Multiple Choice

Jimbob Company has two business alternatives - A & B with different total annual costs as set out below: Additionally,if alternative B is chosen the business will have to use some space for its own purposes that is currently being rented to an outside business for $5,000 per year. What are the total differential costs between the two alternatives?

• A) $2,000.
• B) $3,000.
• C) $5,000.
• D) $7,000.

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Definitions:

Simple Interest

Interest calculated only on the initial amount of money deposited or loaned, not on any interest accrued over time.

Ordinary Interest

Interest calculated based on a 360-day year, often used in banking for loans and savings.

Exact Interest

Interest calculated based on the actual number of days in a year or a specific time period, often used in financial transactions.

Exact Interest

A precise calculation of interest accrual that adheres strictly to the actual number of days in the calendar year, often set at 365 or 366 days.