Question 12

1. 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 $12,245, and they can borrow the money from Bank B, which has offered to lend the firm $12,245 for 1 months at an APR of 13% (compounded). The loan has a 1.54% 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.