Owen Expects to Receive $30,000 at the End of Next

question 39

Multiple Choice

Owen expects to receive $30,000 at the end of next year from a trust fund. If a bank loans money at an interest rate of 8.2%, how much money can he borrow from the bank on the basis of this information?

• A) $2460
• B) $13,863
• C) $27,726
• D) $32,460

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Definitions:

Profitability Ratios

Ratios that measure the amount of operating income or net income an organization is able to generate relative to its assets, owners’ equity, and sales.

Return On Equity

Net income divided by owners’ equity; also called return on investment (ROI).