Owen Expects to Receive $20 000 at the End of Next

question 61

Multiple Choice

Owen expects to receive $20 000 at the end of next year from a trust fund. If a bank loans money at an interest rate of 7.5%, how much money can he borrow from the bank on the basis of this information?

• A)$11 428
• B)$21 500
• C)$15 000
• D)$18 605

---

Definitions:

Short-term Obligations

Financial commitments or debts that are due to be paid within one year.

Past Performance

A review of an entity's previous achievements and results, often used to predict future success or potential.

Fair Presentation

An accounting principle that ensures financial statements are accurate, complete, and in adherence with applicable standards, providing a true representation of an entity's financial performance and position.

SEC Filings

Documentation companies are required to submit to the U.S. Securities and Exchange Commission (SEC), providing a comprehensive overview of a company's performance, financial condition, and management.