Drive with Us Is an Automobile Retailer and Pays Floor

question 199

Multiple Choice

Drive with Us is an automobile retailer and pays floor plan financing to finance the cars they hold in inventory. If the interest rate on their floor plan financing is 6 percent, how much do they pay in interest per day on a car with a wholesale price of $50,000?

• A)$5.75
• B)$9.50
• C)$8.22
• D)$7.57

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Definitions:

Currency

A system of money in general use in a particular country.

Checking Accounts

Bank accounts that allow the owner to make deposits, write checks, and withdraw funds with ease, typically used for daily transactions.

Liquid Investment Assets

Assets that can be quickly converted into cash with minimal impact on their price, such as stocks and bonds.

Internal Controls

Processes and procedures implemented to assure integrity and accuracy of financial and operational information, prevent fraud, and protect the assets of the organization.