You Borrow $10,000 at an Interest Rate of 5% to Open

question 144

Multiple Choice

You borrow $10,000 at an interest rate of 5% to open a snow cone stand.You will earn an economic profit if

• A)the return on your investment is 5%.
• B)the return on your investment is greater than 5%.
• C)the return on your investment is between 0 and 5%.
• D)the return on your investment is 10% or greater.

---

Definitions:

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Net Profits

The amount of income that remains after subtracting all expenses, taxes, and costs from total revenue.

Shareholders

Individuals or entities that own shares in a corporation, thereby having an interest in its performance and governance.

De Jure Corporation

A corporation whose existence is the result of incorporators having fully or substantially complied with the relevant corporation statutes.