Suppose You Borrow $95

question 5

Multiple Choice

Suppose you borrow $95.24 for one year at 5% and invest $95.24 for two years at 7%.For the time period beginning one year from today,you have:

• A)borrowed at 7%.
• B)invested at 7%.
• C)borrowed at 9%.
• D)invested at 9%.

---

Definitions:

Weekly Cash Flows

The movement of cash in and out of a business on a weekly basis, tracking how money is spent and received.

Opportunity Cost

The expense incurred by not choosing the second-best option while deciding.

Monthly Cash Flows

The total amount of money being transferred into and out of a business, particularly during a month.

Lockbox System

A system used by companies to expedite the collection of check payments by having them processed through a bank's PO Box.