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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 $13,535, and they can borrow the money from Bank B, which has offered to lend the firm $13,535 for 2 months at an APR of 14% (compounded). The loan has a 1.5% loan origination fee. What would be the cost for Company A if they decide to borrow from Bank B? NOTE: Answer in percentages. If your answer is 0.0204, you must answer 2.04. Do not use the "%" sign.
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