A Company Issues a 120-Day, 14% Note for $16,000

question 231

Multiple Choice

A company issues a 120-day, 14% note for $16,000. What is the principal amount of the note? (Round your answer to the nearest dollar.)

• A) $18,240
• B) $16,000
• C) $15,253
• D) $16,747

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Definitions:

Fiduciary Duty

An obligation to act in the best interest of another party, such as a trustee for a beneficiary, including acting with loyalty and care.

Partnership

A business organization in which two or more individuals manage and operate the business in accordance with the terms and objectives set out in a Partnership Agreement.

Limited Liability Company

A Limited Liability Company (LLC) is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Members' Ownership

Refers to the proportional interest or share that members have in an organization, cooperative, or partnership, reflecting their stake or investment.