Making Extra Payments on a Loan

question 92

Multiple Choice

Making extra payments on a loan

• A)reduces the total interest paid.
• B)frees up cash flow for other expenses.
• C)lengthens the maturity of the loan.
• D)reduces the size of future payments.

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Definitions:

Contribution Margin

The amount remaining after variable costs have been subtracted from revenue, which contributes to covering fixed costs and generating profit.

South Business Segment

A term possibly referring to a division or part of a company that operates in the southern region, focusing on geographical business segmentation.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overheads in the cost of a product.

Last Year

Refers to the 12-month period directly preceding the current date, used in comparative financial analysis.