Steve Wilson, a chef at a major restaurant in San Francisco, wants to start his own restaurant.He surveys the market, finds a suitable location, and calculates how much money he will need to lease the building and purchase the necessary equipment and supplies.Steve visits his banker and requests a loan.The money Steve will receive as a loan and the resources he will purchase with it are known as _____.
A) capital
B) profit
C) revenue
D) collateral
E) stock

Question

Quizplus · Accepted Answer

The money Steve will receive as a loan is known as capital, which is the financial resources necessary to start and maintain a business. Purchasing equipment and supplies with this loan can also be considered as part of the capital investment for the restaurant. Option B, profit, is the money earned after the restaurant begins to operate and generate revenue. Option C, revenue, is the income earned by the business from its goods or services, but it is not applicable in this scenario as Steve has not yet started his restaurant. Option D, collateral, is the property or asset that is pledged as security for a loan, but it is not necessary in this case as Steve is borrowing money without collateral. Option E, stock, is the ownership interest in a corporation and is not relevant to this situation.

Steve Wilson, a Chef at a Major Restaurant in San