Suppose You Could Borrow $500,000 for One Year at an Interest

question 94

Short Answer

Suppose you could borrow $500,000 for one year at an interest rate of 10 percent.You were virtually certain of investing this $500,000 for one year and making a profit of $75,000 (from which you would pay the interest you owe).
-Would you borrow the money and invest it?

---

Definitions:

Sales

The total revenue generated from the sale of goods or services over a specific period.

Revenue Account

An account that tracks the income earned from normal business operations, such as sales of goods or services.

Sales Tax Payable

A liability account in a company's financial statements, representing sales tax collected from customers but not yet remitted to the government.

Sale

The exchange of a product or service for money, constituting the main operational activity for most businesses.