Instruction 20

Instruction 20.1: Use the information to answer the following question(s) .
Cypress Systems Inc., of Florida, agrees to sell specialized hydroponic growing equipment to Landcaster's of Australia. Because the two companies have never done business with each other, Cypress requires a banker's acceptance as payment for the $1,000,000 order. The banker's acceptance carries a 1.4% commission per annum and payment is to be received in 6 months. If Cypress Inc. chooses to discount or sell the bankers acceptance to its bank, the discount rate is 1.00% per annum.
-Refer to Instruction 20.1. ________ is an unsecured promissory note.

A) A banker's acceptance
B) An overdraft
C) A securitized loan
D) Commercial paper

Correct Answer:

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