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D'Anconia Copper Has Borrowed $5 Million for Six Months at a Stated

Question 36

Multiple Choice

d'Anconia Copper has borrowed $5 million for six months at a stated annual rate of 10%,using inventory stored in a field warehouse as collateral.The warehouse charges a $25,000 fee,payable at the end of the six months.The effect annual rate on this loan is closest to:


A) 9.3%
B) 11.3%
C) 15.2%
D) 17.1%

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