Freeman Corp

question 21

Multiple Choice

Freeman Corp., a large corporation, plans to issue 45-day commercial paper with a par value of $3,000,000. Freeman expects to sell the commercial paper for $2,947,000. Freeman's annualized costof borrowing is estimated to be ____ percent.

• A) 14.39
• B) 14.13
• C) 14.59
• D) 14.33
• E) none of the above

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Definitions:

Cost of Goods Sold

Costs incurred directly from producing the goods a company offers, encompassing labor and material expenses.

Physical Inventory

A physical count of merchandise or commodities an organization has on hand at a specific time.

FOB Shipping Point

A term used in shipping contracts to indicate that the buyer assumes responsibility for the goods and the shipping costs from the point of departure.

FOB Shipping Point

A term used in shipping agreements that means "Free on Board Shipping Point," indicating that the buyer is responsible for freight and other shipping costs from the seller's location.