An Organization Needs to Borrow a Large Amount of Cash

question 6

Multiple Choice

An organization needs to borrow a large amount of cash to fund its expansion plan. Which of the following annual interest rates is least expensive?

• A) 7 percent simple interest with a 10 percent compensating balance.
• B) 7 percent simple interest paid at the end of each year.
• C) 7 percent discount interest.
• D) 7 percent compounding interest.

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Definitions:

Primary Category

The main or most significant classification into which a subject, object, or idea is placed, based on its most defining attributes.

Primary Categories

The main or most fundamental classifications or divisions within a system or framework, serving as the basis for organization or analysis.

Learned Characteristics

Traits or behaviors acquired through experience or education rather than inherited.

Career Success

Achieving objectives and goals in one's professional path, often marked by advancements, fulfillment, and recognition.