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Oksana_A [137]
4 years ago
9

A business owner applies for a bank loan to launch a fairly low-risk project. After receiving the loan, she cancels the low-risk

project and instead uses the borrowed funds for a high-risk venture. This is an example of
Business
1 answer:
Dahasolnce [82]4 years ago
7 0

Answer:

Moral hazard

Explanation:

The moral hazard refers to the situation in which the person has the benefit to increase the risk as it does not bear or suffered the whole risk

According to the given situation, it is mentioned that the business owner canceled the low risk project and used the borrowed funds for taking high risk in the venture after loan receiving

This situation represents the moral hazard scenario

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Answer:

$213,250

Explanation:

The calculation of cash inflow is shown below:-

                    Expected cash collections

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April           $282,500        5%                    $14,125

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A(n) ____ strategy requires little initial investment, is heavily regulated, and provides little opportunity to modify products
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Explanation:

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