Carborundum Metals Issues Commercial Paper with a Face Value of $1,000,000

question 26

Multiple Choice

Carborundum Metals issues commercial paper with a face value of $1,000,000 and a maturity of three months. Carborundum receives net proceeds of $992,000 when it sells the paper. If the prime rate is 8% APR compounded quarterly, how much savings in interest did Carborundum realize by accessing the commercial paper market?

• A) $8,000
• B) $9,800
• C) $10,200
• D) $11,840

---

Definitions:

Long-Term Memory

A type of memory capable of storing a large amount of information for potentially unlimited duration, including facts, experiences, and skills.

Short-Term Memory

The part of the memory system where information is stored for a brief period, typically from a few seconds to a minute.

Memory Recall

The process of retrieving information from the past, which can be consciously remembered such as facts, events, and experiences.

Short Answer

A type of question or prompt that requires a brief and specific response, often used in exams or interviews.