Which of the Following Are Recommended If You Loan Money

question 130

Multiple Choice

Which of the following are recommended if you loan money to a friend or relative?

• A)Charge a market rate of interest.
• B)Have a lawyer draft a loan contract.
• C)Put the agreement in writing.
• D)Make the loan due within one year or less.
• E)All of the these apply.

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Definitions:

Operating Profit

Income from business operations after operating expenses are subtracted from gross profits, but before taxes and interest expenses.

Operating Expense

ongoing costs for running a product, business, or system.

Operating Profit

The earnings of a business from its core operations, excluding the effects of interest and taxes.

Mark-up

The surplus added onto the base cost of products intended to cover operational costs and generate profit.