A Longer-Term Loan

question 79

Multiple Choice

A longer-term loan

• A)costs you more in interest.
• B)increases your monthly payments.
• C)is almost always the best alternative for credit users.
• D)gives you access to additional sources of financing.

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Definitions:

Net Cash Inflows

The amount of cash that a business receives over a period, minus the amount of cash outflows.

Inventory Cost

Inventory cost includes the costs associated with purchasing, storing, and managing goods that a business intends to sell; it typically comprises the purchase price, warehousing costs, and any other expenses related to holding inventory.

NPV Rule

The principle that an investment is considered acceptable if its net present value (NPV) is positive, under the context of discounted cash flow analysis.

Decision-Maker

An individual or group responsible for making choices that will impact themselves or others, often involving allocation of resources or resolutions in the face of challenges.