Frankfort corporation purchases an investment in bradley, inc. at a purchase price of $9.8 million cash, representing 40% (at book value) of bradley. during the year, bradley reports net income of $1,680,000 and pays $413,000 of cash dividends. at the end of the year, the market value of frankfort’s investment is $11.9 million. what amount of equity earnings would be reported by frankfort corporation? a. $165,000 b. $672,000 c. $507,000 d. $1,267,000 e. none of the above

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan