If the Discount Method Is Used to Calculate a Finance

question 120

True/False

If the discount method is used to calculate a finance charge of $250.60 on a $2,400 loan,the amount to be disbursed to the borrower is $2,400.

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Definitions:

Physical Existence

The actual, tangible presence of items or assets, often verified during inventory or asset audits.

Depreciation Expense

The allocation of the cost of an asset over its useful life, reflecting the usage and wear and tear of the asset.

Accumulated Cash

The total amount of cash that a company has generated and saved over its history, minus any cash payments or dividends made to shareholders.

Leased Asset

An asset that is rented under a contract where the lessee (user) has the right to use the asset in exchange for regular payments to the lessor (owner).