At the Beginning of the Year,you Have an Outstanding Short-Term

question 81

Multiple Choice

At the beginning of the year,you have an outstanding short-term loan of $274 which was used to cover your cash needs for the previous year.The interest expense for the year is $19.The projected net cash flow for this year is $123,prior to any payment of principal or interest on this loan.What is your anticipated loan balance at year end?

• A)$151
• B)$170
• C)$176
• D)$189
• E)$193

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Definitions:

Non-Recourse

Pertaining to a loan or obligation where the lender's recovery, in the event of default, is limited to the collateral securing the loan, with no further claim on the borrower’s assets.

Money Orders

A payment order for a pre-specified amount of money, similar to a check, that is widely used for safe transfers of funds.

Promissory Notes

Written promises to pay a specified sum of money to a named party, under specified conditions.

Uniform Commercial Code

A complete collection of regulations that oversee every commercial activity within the United States.