Firm a Is Paying $300,000 in Fixed Interest Payments a Year

question 10

Multiple Choice

Firm A is paying $300,000 in fixed interest payments a year while Firm B is paying LIBOR plus 30 basis points on $5 million loans.The current LIBOR rate is 5.5 percent.Firm A and B have agreed to swap interest payments.What is the net payment between these firms this year?

• A)Firm A pays $10,000 to Firm B
• B)Firm B pays $10,000 to Firm A
• C)Firm B pays $12,500 to Firm A
• D)Firm A pays $15,000 to Firm B
• E)Firm B pays $15,000 to Firm A

Comprehend the enforceability of oral partnership agreements.

Acknowledge the recognition of partnerships as independent entities.

Understand a partner's fiduciary duties towards the partnership.

Identify the rights and duties of partners in managing the partnership.

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Definitions:

Real Goods

Physical products or commodities that can be touched, seen, and used, contrasting digital or virtual goods.

Aggregate Expenditure

The total spending in an economy, including consumption, investment, government spending, and net exports, at a given time.

Government Purchases

Expenditures by the government sector on goods and services intended to satisfy public consumption and investment demands.

Inventory

The total amount of goods and materials held in stock by a business, warehouse, or store.