The Average Default Rate in the Economy Is 1

question 10

Multiple Choice

The average default rate in the economy is 1.5% of the face value of outstanding debt defaults per year. How many years will it be on average before half the firms are no longer in existence if no new firms enter the economy?

• A) 44 years
• B) 45 years
• C) 46 years
• D) 47 years

Understand the importance and rationale behind codes of professional conduct in legal and business contexts.

Grasp the accessibility of legal aid and counsel for small business owners and the general public.

Learn the appropriate times and reasons for consulting a lawyer in business decisions.

Comprehend the principles of ethical behavior such as integrity, honesty, and professionalism.

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Definitions:

Monthly Sales

The total revenue generated from goods or services sold by a business within a month.

Variable Expenses

Costs that change in proportion to the activity of a business.

Sales

Revenue generated from the sale of goods or services to customers.

Fixed Expenses

Costs that do not change in total regardless of changes in the volume of production or sales.