Question
Company A is currently cash-constrained, and must make a decision about whether to delay paying one of its suppliers, or taking out a loan. They
Company A is currently cash-constrained, and must make a decision about whether to delay paying one of its suppliers, or taking out a loan. They owe the supplier $13457, and they can borrow the money from Bank B, which has offered to lend the firm $13457 for 2 months at an APR of 14% (compounded). The loan has a 1.96% loan origination fee.
What would be the cost for Company A if they decide to borrow from Bank B?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
