Use the Information to Answer the Following Question(s)

question 72

Multiple Choice

Use the information to answer the following question(s) .
Cypress Systems Inc., of Florida, agrees to sell specialized hydroponic growing equipment to Landcaster's of Australia. Because the two companies have never done business with each other, Cypress requires a banker's acceptance as payment for the $1,000,000 order. The banker's acceptance carries a 1.4% commission per annum and payment is to be received in 6 months. If Cypress Inc. chooses to discount or sell the banker's acceptance to its bank, the discount rate is 1.00% per annum.
-Refer to Instruction 16.1. What is the total Cypress can expect to receive if the firm takes payment today?

• A) $993,000
• B) $995,000
• C) $988,000
• D) $996,000

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Definitions:

Electronic Agents

Computer systems or software programmed to autonomously perform tasks on behalf of users, such as processing information or executing transactions.

Legitimizes

To make something legal, valid, or acceptable according to law or social norms.

Agency Coupled With An Interest

An irrevocable agency agreement in which the agent is given an interest in the subject matter of the agency. Also called irrevocable agency.

Principal

The original sum of money borrowed in a loan, or the amount of the investment, not including the interest or profits.