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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 $14,370, and they can borrow the money from Bank B, which has offered to lend the firm $14,370 for 2 months at an APR of 17% (compounded). The loan has a 1.88% loan origination fee.
What would be the cost for Company A if they decide to borrow from Bank B?
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