Amalgamated Appliance Inc

question 74

Multiple Choice

Amalgamated Appliance Inc.has planned a 3-month issue of commercial paper with a face value of $25,000,000.The paper is set to sell at 98.5% of face value.What is the EAR?

• A)6.08%
• B)6.23%
• C)3.04%
• D)3.12%

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, revealing profit or loss.

Retained Earnings

Retained earnings are the portion of a company’s profits that is kept or retained rather than being paid out as dividends to shareholders or reinvested into the business.

Closing Entries

Entries recorded at the conclusion of an accounting cycle to shift balances from temporary to permanent accounts.