Use the Information to Answer the Following Question(s)

question 29

Multiple Choice

Use the information to answer the following question(s) .
Jackson Automotive Inc. of California agrees to sell specialized automotive parts to Hidatsi of Korea. Because the two companies have never done business with each other, Jackson requires a banker's acceptance as payment for the $1,000,000 order. The banker's acceptance carries a 1.4% commission per annum and payment is to be received in 6 months. If Jackson Inc. chooses to discount or sell the bankers acceptance to its bank, the discount rate is 1.00% per annum.
-Refer to Instruction 19.1.What is the size of the commission Jackson Automotive will pay the bank for the banker's acceptance?

• A)$7,000
• B)$5,000
• C)$12,000
• D)$14,000

---

Definitions:

Breach of Contract

The failure to fulfill the terms of a contract by one or more parties involved.

Garnishee Order

A legal order issued by a court to withhold a person's assets or earnings for the purpose of settling a debt or judgment.

Bank of Toronto

Historically, a Canadian bank that merged with The Dominion Bank to form The Toronto-Dominion Bank, now commonly known as TD Bank Group.

Balance of Probabilities

The standard of proof used in civil cases, requiring that something is more likely to be true than not for it to be considered proven.