Which of the Following May Indicate Potential Debt Problems

question 65

Multiple Choice

Which of the following may indicate potential debt problems?

• A)paying only the minimum balance each month.
• B)always borrowing to make it to next payday.
• C)your wages have been garnished to pay for debt.
• D)your utility company cuts off service because your bills are unpaid.
• E)paying only the minimum balance each month, always borrowing to make it to next payday, your wages have been garnished to pay for debt, and your utility company cuts off service because your bills are unpaid.

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Definitions:

IRR Method

The Internal Rate of Return method, a capital budgeting technique used to evaluate the profitability of an investment or project.

Hurdle Rate

The minimum acceptable rate of return on an investment, used as a benchmark to determine the viability of the project or investment.

Capital-Budgeting

The process by which investors or managers evaluate and select long-term investments based on their potential to generate net revenues.

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, typically represented by the yield on government bonds.