Mac Department Stores Sell Goods on Terms of Net 40

question 46

Multiple Choice

Mac Department Stores sell goods on terms of net 40.The store's average monthly sales (all on credit) are $70,000.Mac pledges all of its receivables to the bank,which advances 80% of the face value of the receivables at a rate of 2.5% above prime.The bank also charges a 1% processing fee on all receivables pledged.Mac borrows the full amount possible,and the current prime rate is 5%.What is the annual percentage rate (APR) of using this source of financing for one full year?

• A) 23.5%
• B) 22.5%
• C) 21.8%
• D) 19.1%

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Definitions:

Cytotoxic T Cell

A type of immune cell capable of killing cancer cells, cells that are infected (particularly with viruses), or cells that are damaged in other ways.

Killer Cell

A type of immune cell that can kill cancer cells, cells infected with viruses, or other damaged or dangerous cells.

Passive Immunity

The type of immunity obtained by the transfer of antibodies from one individual to another, such as a mother to her infant through breast milk, providing immediate but temporary protection.

Venomous Snake

A snake that produces venom, a toxic substance used predominantly for immobilizing or killing prey and for defense against predators.