If You Borrow $100 at 10 Percent Simple Annual Interest

question 119

Multiple Choice

If you borrow $100 at 10 percent simple annual interest and repay it in one lump-sum at the end of one year, you will repay:

• A) $100.
• B) $105.
• C) $110.
• D) $115.
• E) $120.

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Definitions:

Stockholders' Equity

Represents the owners' claim after subtracting total liabilities from total assets; it consists of initial capital investment, retained earnings, and additional paid-in capital.

Net Operating Income

The income that comes from a firm's primary business activities, not including the subtraction of interest and taxes.

Average Operating Assets

The average value of the assets involved in the daily operations of a business over a specific period, used to measure efficiency.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the ownership interest of the shareholders.