Hammond Motors Is Considering Using a Public Warehouse Loan as Part

question 22

Multiple Choice

Hammond Motors is considering using a public warehouse loan as part of its short-term financing.The firm will require a loan of $2 million for three months.Interest on the loan will be 12% (APR,compounded quarterly) to be paid at the end of the quarter.The warehouse charges 1% of the face value of the loan,payable at the beginning of the quarter.The effect annual rate on this loan is closest to:

• A)9.3%
• B)11.3%
• C)15.2%
• D)17.1%

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Definitions:

Genus Homo

Refers to the category in biological classification that includes modern humans (Homo sapiens) and several extinct species closely related to humans.

Tropics

The region of the Earth centered on the equator and between the Tropic of Cancer in the north and the Tropic of Capricorn in the south, characterized by a warm climate year-round.

Adapted Through Culture

The process by which human groups adjust and change their cultural practices in response to environmental, social, or technological challenges.

Genus Homo

The biological genus to which humans belong, characterized by higher cognitive and social abilities compared to other primates.