Suppose IBM Decided to Issue Commercial Paper in Denominations of $5,000

question 92

Multiple Choice

Suppose IBM decided to issue commercial paper in denominations of $5,000 to raise a large sum of money. Since the commercial paper is secured only by IBM's reputation,

• A) IBM does not have to pay back the principal.
• B) IBM has to pay interest rates higher than those charged by commercial banks for short-term loans.
• C) no interest is paid.
• D) no collateral is involved.
• E) the commercial paper can be issued only in $1,500 or $10,000 denominations.

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Definitions:

Total Productive Maintenance

A proactive maintenance approach focusing on maximizing equipment effectiveness through the participation of all employees.

Employee Empowerment

A management strategy that gives employees autonomy, authority, and the capacity to make decisions affecting their work.

Deteriorated Customer Relations

A decline in the quality of interactions and satisfaction of customers with a company's products or services, potentially affecting loyalty and revenues.

Lost Sales

Lost Sales refer to potential revenue that was not earned due to stockouts, uncompetitive offerings, or other factors that prevented a transaction with a willing buyer.