Use the Table for the Question(s)below

question 42

Multiple Choice

Use the table for the question(s) below.
Suppose you have the following Loans/Investments
-If your income tax rate is 30%,then the after-tax EAR for your home equity loan is closest to:

• A)6.0%.
• B)5.9%.
• C)8.6%.
• D)5.8%.

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Definitions:

Asset Expires

Refers to the expiration or depletion of the useful life or service period of an asset, at which point it may no longer be productive or useful for the business.

Revenue

Revenue is the total amount of money that a company receives from its activities, mainly from sales of products or services, before any expenses are subtracted.

Original Cost

The purchase price of an asset or service, including installation fees, transportation charges, and any other expenses necessary to make the asset operational.

Depreciation Expense

This refers to the allocation of the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up during an accounting period.