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Hand-to-Mouth Company needs a loan of $ 10,000 for the 30 days following. Try to decide which alternative to use of the three below: -
Hand-to-Mouth Company needs a loan of $ 10,000 for the 30 days following. Try to decide which alternative to use of the three below: - Alternative A: Do not take advantage of the discount of your commercial credit agreement, which offers conditions of 2/10 and 30 net. - Alternative B: Borrow the money from bank A, which has offered to lend to the company $ 10,000 for 30 days with an APR of 12%. The bank will require a balance for reciprocity (which does not pay interest) of 5% of the face value of the loan, and will charge $ 100 issuance fees for the loan, which means that the business must borrow even more than $ 10,000. - Alternative C: Borrow the money from bank B, which offered the company $ 10,000 for 30 days with a 15% APR. The loan has issuance costs of 1%.
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