A 1-Year,$30,000,10 Percent Note Is Signed on May 1

question 36

Multiple Choice

A 1-year,$30,000,10 percent note is signed on May 1.If the note is repaid on October 1 of the same year,how much interest expense is incurred?

• A)$2,000
• B)$625
• C)$1,250
• D)$600

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Definitions:

Cost-cutting Proposal

A strategy or plan proposed to reduce expenses in order to improve profitability.

Reduction in Costs

Actions or strategies implemented to decrease expenses and improve profitability.

Increase in Sales

A rise in the quantity or dollar value of a company's sales over a certain period, indicating growth or improvement in market demand.

Maintenance Contract

An agreement where one party commits to maintain an asset owned by another party, typically in exchange for a fee.