Ultimate Industries Issues Commercial Paper with a Face Value of $500,000

question 10

Multiple Choice

Ultimate Industries issues commercial paper with a face value of $500,000 and a maturity of six months. Ultimate receives net proceeds of $486,000 when it sells the paper. If the prime rate is 8.5% APR compounded quarterly, how much savings in interest did Ultimate realize by accessing the commercial paper market?

• A) $4,248
• B) $6,874
• C) $7,291
• D) $12,480

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Written, typed, or electronic matter that provides information or evidence or that serves as an official record.

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A device that operates on electrical power and incorporates circuits and components to perform a specific function, such as a smartphone or laptop.

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The act of generating or bringing forth outcomes from a process, experiment, or activity.

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Explicitly stated or defined regulations or principles within a particular context or system.