On January 1, 2014, ER Signed a $120,000, 10%, Three-Year

question 36

Multiple Choice

On January 1, 2014, ER signed a $120,000, 10%, three-year, note payable.The proceeds are to be used to purchase a computer and related software for the company.The lending institution advanced proceeds of $115,800 and took a mortgage on the computer.The note is payable in three equal annual instalments starting on December 31, 2014.The effective interest rate to use for this debt is (rounded to the nearest percent; do not interpolate) :

• A)12%.
• B)13%.
• C)10%.
• D)11%.

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Definitions:

Planning Department

A division within an organization responsible for establishing strategies and coordinating the efforts required to achieve the organization’s goals.

Strategic Planning Pitfall

A common error or mistake made during the strategic planning process that can lead to unsuccessful outcomes or failure to achieve desired goals.

Corporate Culture

The shared values, beliefs, ethics, and practices that characterize an organization and guide its employees' behavior.

Environmental Opportunities

Circumstances in the external environment that a business can leverage to its advantage for growth or improvement.