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Accounting 125000 loan for 5 years to start business

Owner paid 250 to the county for a business license

2 Answers

4 votes

Final answer:

The question involves understanding the explicit and implicit costs associated with starting a business, such as loans and opportunity costs, as well as sources of capital like personal investments and angel investors.

Step-by-step explanation:

The subject matter of this question revolves around accounting and the financial decisions related to starting a business. When accounting for a $125,000 loan over a 5-year period for a business startup, one would need to consider the repayment of the principal and interest over time. Additionally, an explicit cost associated with starting a business is the fee for obtaining a business license, such as the $250 paid to the county.

Beyond these explicit costs, there are also implicit costs, such as the opportunity cost of the business owner's time and potential salary if they were not starting the business. For example, if Eryn were earning an annual salary of $125,000 and she quits her job to start her own practice, this forgone salary is considered an implicit cost.

Moreover, the question discusses the sources of capital for startups. Common methods include personal savings, bank loans, and seeking investments from angel investors, who provide capital in exchange for ownership equity. Each potential source of capital has its own considerations and trade-offs that must be assessed by the business owner.

User Chad Birch
by
7.7k points
3 votes

Answer:

p

Step-by-step explanation:

ok so first u take away the underlined letter and give and carry sorry the first one

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