Which of the Following Is True of Loan Maturity

question 34

Multiple Choice

Which of the following is true of loan maturity?

• A)The longer the loan maturity,the higher the amount of interest paid.
• B)The shorter the loan maturity,the higher the total cost of borrowing.
• C)The longer the loan maturity,the higher the monthly payments.
• D)The shorter the loan maturity,the lower the monthly payments.
• E)The longer the loan maturity,the lower the total cost of borrowing.

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Definitions:

Income Tax Expense

Income tax expense is the charge to earnings in a given period for taxes owed to federal, state, and local governments based on taxable income.

Income Tax

Tax levied on company income.

AASB 112

The Australian Accounting Standards Board's standard regarding Income Taxes, which dictates the accounting treatment for current and deferred tax.

Deferred Tax

A tax liability or asset that arises due to the temporary differences between the accounting income and the taxable income.