The Bad Guys Company Is Notoriously Known as a Slow-Payer

question 15

Multiple Choice

The Bad Guys Company is notoriously known as a slow-payer.It currently needs to borrow $25,000 and only one company will even deal with Bad Guys.The terms of the loan call for daily payments of $30.76.The first payment is due today.The interest rate is 21% compounded daily.What is the time period of this loan?

• A)2.88 years
• B)2.94 years
• C)3.00 years
• D)3.13 years
• E)3.25 years

---

Definitions:

Decrease in Inventories

A reduction in the quantity or value of the inventory on hand, which may result from sales, usage, spoilage, or obsolescence.

Prepaid Expenses

Prepaid expenses are future expenses that have been paid in advance and are recorded as assets until they are actually incurred.

Dividends Payable

The amount of declared dividends that a company has committed to pay out to its shareholders but has not yet distributed.

Prepaid Assets

Assets that represent future expenses that have been paid in advance and will be recognized as expenses when they are actually incurred.