1) Pets Store Inc. sells on terms of 1/10, net 55. What is the effective annual cost of trade credit under these terms? Use a 365-day year. Round the answer to two decimal places in percentage form.

Please choose the correct answer from the list (17.35%; 12.98%; 8.49%; 25.47%; 10.53%)

2) Front System Inc. expects to have $14,882,999 in credit sales during the coming year. Currently, all checks are sent to the home office. A proposed lockbox system can eliminate 2 days of float, releasing funds which, when invested, will earn 6.17 percent per year. What annual savings can Front System expect if the system is implemented? Use a 365-day year. Round the answer to two decimal places and use dollar sign and comma as appropriate.

Please choose the correct answer from the list ( $1,345.87; $5,031.68; $8,988.23; $7,123.65; $15,988.22)

3) Brown Bear Inc. requires $270,000 in short-term credit and is currently arranging a loan with its bank. Brown Bear plans to use the funds for 6 months, the annual rate on the loan is 12 percent, and the bank will require a 10 percent compensating balance.

If Brown Bear must have loan proceeds of $270,000, then it must borrow how much?

Question options:

	$286,200.
	$2,700,000.
	$300,000.
	$270,000.