Nancy Invested $5,000 in a Certificate of Deposit Earning 4

question 57

Multiple Choice

Nancy invested $5,000 in a certificate of deposit earning 4% per year.Unfortunately,she needed to withdraw it before the maturity date.If the penalty was two months of interest,what was her total penalty (round to the nearest dollar) ?

• A) $0
• B) $4
• C) $20
• D) $33
• E) $200

Understand the concepts and significance of lines of credit and trade credit in business financing.

Grasp the concept and financial implications of factoring and how it impacts cash flow and credit management.

Identify the conditions and consequences associated with term loans, including restrictive covenants.

Understand the advantages and risks associated with leasing and sale-leaseback arrangements.

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Definitions:

Price Discrimination

The strategy of selling the same product at different prices to different groups of consumers, based on willingness to pay.

Discount Retailers

Stores that offer products at lower prices by accepting lower margins in return for a high sales volume.

Arbitrage

The practice of taking advantage of price differences between markets to make a profit.

Vertical Contracts

Agreements between firms at different levels in the supply chain (e.g., manufacturer and retailer) to govern the terms of sale or purchase.