Tangshan Mining Borrowed $10,000 for One Year Under a Revolving

question 103

True/False

Tangshan Mining borrowed $10,000 for one year under a revolving credit agreement that authorized and guaranteed the firm access to $20,000. The revolving credit agreement had a stated interest rate of 8 percent and charged the firm a half percent commitment fee on the unused portion of the agreement. Based on this information, the effective annual interest rate on the loan was 8.50 percent.

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Definitions:

Stress

The psychological and physical strain or tension experienced by individuals in response to challenging, demanding, or threatening situations.

Rationalization

The process of providing reasonable explanations for behaviors, decisions, or feelings that may otherwise seem unjustifiable.

Projection

A defense mechanism where an individual attributes their own unacceptable thoughts, feelings, or motives to someone else.

Compensation

Payment or reward given to someone, typically as a recompense for loss, injury, or suffering, or as part of employment terms.