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3 May, 08:08

7. A business begins with $1,000,000 from its owners. It places $100,000 into a bank account which it wishes to maintain as a cash reserve. It needs to purchase $1,000,000 of equipment and materials. How much does it need to borrow

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  1. 3 May, 10:13
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    The amount need to borrow a owner is $100,000

    Step-by-step explanation:

    The total amount a owner having to start a business = $1,000,000.

    He wishes to place $ 100,000 into bank account to maintain as cash reserve.

    Now the amount he left with to spent in business purposes = $1,000,000 - $100,000 = $ 900,000.

    He needs to purchase equipment and material of $1,000,000

    But he is left with only $900,000.

    So the amount he has to borrow to fulfill his business requirement is

    = $1,000,000 - $900,000 = $100,000
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