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You Have Approached Your Local Bank for a Start-Up Loan

question 38

Multiple Choice

You have approached your local bank for a start-up loan commitment for $1,000,000 needed to open a car repair store. You have requested that the term of the loan be one year. Your bank has offered you the following terms: size of loan commitment = $1,000,000, term = one year, up-front fee = 20 basis points, back-end fee = 50 basis points, and rate on the loan = 9 percent. If you immediately take down $750,000 and no more during the year, what is the total interest and fees you have paid on this loan commitment?

Understand the concept of cash and credit sales, and the timing of collections.

Learn the procedure for preparing a cash budget, including the estimation of cash receipts and disbursements.

Calculate variable and fixed manufacturing overhead costs.

Grasp the importance, sequence, and interconnection of various components of the budgeting process, including sales, production, direct labor, and overhead budgets.

Definitions:

Revolutionary Unionism

A form of unionism that seeks to unite all workers to fundamentally change societal structures, prioritizing social change over contract negotiation.

Worker Solidarity

The sense of unity and mutual support among workers, often in the context of a shared struggle or labor movement.

Square Deal Program

President Theodore Roosevelt's domestic program, which aimed at ensuring fair treatment for all citizens without regard to social status.

Active Government Role

Involves the government taking significant actions to influence and regulate economic, social, and other sectors to achieve desired outcomes, such as economic stability, social welfare, and public safety.