Lightbulbs

question 92

Essay

Lightbulbs.com sells industrial and institutional lighting supplies through its website. It sells directly to businesses and organizations such as universities and hospitals on terms of net 90. To finance its rather large investments in receivables and inventory, the firm has an average need for $2,000,000 in short-term loans. It is choosing between 3 alternative arrangements:
Converse Bank offers a 4.75% APR with interest and principal paid at the end of the year.
Guaranty Bank offers a rate of 4.5% with interest discounted at the time of the loan.
County Bank offers 4.25% with a 10% compensating balance.
Which bank offers the APR when all terms of the loan are considered? You may assume that required amounts are borrowed for the full year.

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Definitions:

Emotionally Complex

Having or showing a wide range of emotions, often simultaneously or fluctuating rapidly, indicating a deep or nuanced emotional capacity.

Human

A member of the species Homo sapiens, characterized by advanced cognitive abilities and society-building behavior.

Social Dominance Orientation

is an attitude characterized by a preference for hierarchy within societies and the domination of lower-status groups by higher-status groups.

Social Order

The organized pattern of social relationships and social institutions that together compose society.