On 1 December 2017,Fine Products Borrowed $84,000 on a 5%,10-Year

question 11

Multiple Choice

On 1 December 2017,Fine Products borrowed $84,000 on a 5%,10-year note with annual instalment payments of $8400 plus interest due on 1 December of each succeeding year.Which of the following describes the first instalment payment made on 1 December 2018?

• A)$8400 principal plus $420 interest
• B)$4200 interest only
• C)$8400 principal plus $8400 interest
• D)$8400 principal plus $4200 interest

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Definitions:

Property Resources

Assets owned by individuals or entities, including land, buildings, and intellectual property, that can be used to produce goods and services.

Purely Competitive Firm

A business that operates in a market where there are many buyers and sellers, none of which can control market prices.

Profit Maximizing

The process by which a company determines the price and output level that returns the greatest profit.

Labor

The employment of both mental and physical human faculties in the generation of products and the delivery of services.