A Corporation Is Planning to Issue $10 Million Worth of 180-Day

question 92

Multiple Choice

A corporation is planning to issue $10 million worth of 180-day commercial paper.In order to reduce the interest rates by 25 basis points (per year) , it plans to back this issue with a standby letter of credit or a loan commitment.The standby letter of credit is available for 20 basis points (per year) to be paid up-front.The loan commitment for $10 million is available for an up-front fee of 15 basis points (per year) and a 5 basis points back-end fee. What are the savings to the corporation if it obtains a standby letter of credit to back its $10 million issue of commercial paper?

• A)$1,250.
• B)$2,500.
• C)$3,750.
• D)$5,000.
• E)$6,250.

Identify the different closing techniques used in sales.

Understand the key elements and effectiveness of assumptive closes.

Differentiate between alternative-choice and minor-points closes.

Recognize appropriate situations for implementing the direct close method.

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Definitions:

Variable Costs

Charges that vary in relation to the volume of output or services provided by a firm.

Fixed Costs

Expenses that do not change regardless of the level of production or business activity, such as rent, salaries, and insurance.

Selling Price

The amount of money for which an item is sold, potentially different from listing or cost price due to discounts or negotiations.

Profit

The financial gain achieved when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.