Present Value of Multiple Annuities a Small Business Owner Visits

question 52

Multiple Choice

Present Value of Multiple Annuities A small business owner visits his bank to ask for a loan.The owner states that he can repay a loan at $1,500 per month for the next three years and then $500 per month for the two years after that.If the bank is charging customers 5.5 percent APR,how much would it be willing to lend the business owner?

• A)$4,046.90
• B)$59,293.50
• C)$24.261.00
• D)$66,000.00

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Definitions:

Time-Driven Activity-Based Costing

A costing method that assigns resource costs to products or services based on time estimates to perform activities.

Customer Cost Analysis

The process of determining and analyzing the costs associated with serving individual customers or customer segments.

Capacity Analysis

The evaluation of a facility's production capabilities to understand the maximum amount of work it can handle or produce.

Tech Support Department

A functional organization within a company providing technical assistance and support related to computer systems, software, and hardware to customers or internal users.