Questions 186-190 refer to the following
letters. Dodge
Household Furniture
Co. 25 east Tenth
Street Chicago,
III May 14,
2008 Mr. Walter Roberts, Office Manager Great
Investment Trust Co. 69 Jones Street, New York
Dear Mr. Roberts, The unfavorable condition of the market here
has compelled us to approach you for a short-term loan of 60,000 dollars to
extricate us from temporary difficulties. We leave it to you to fix the rate of
interest. As we have been doing business to each other’s advantage for so long a
time, we trust that you will be kind enough to oblige us with the said amount.
We promise to pay back the money as soon as business begins to
improve. Your favorable reply will be highly appreciated
by, Yours very respectfully, Dodge Household
Furniture Co. (Signed) Henry Norris
Henry Norris
Manager Great Investment
Trust Co. 69 Jones Street,
New York May 20,
2008 Mr. Henry Norris, Manager Dodge Household
Furniture Co. 25 east Tenth Street Chicago,
III Dear Mr. Norris, We are deeply distressed
to learn from your letter that your company is now in an adverse financial
situation as a result of business depression and badly in need of a loan.
Considering our long-standing clientage of mutual benefit, we deem it our duty
to help you out of the present dilemma. Herewith we send you under separate
cover a check for the full sum as requested Please note that the rate of
interest is 4 % per month and 4.5 % per quarter. We are confident that your
business will soon look up. Wish you very good luck.
Yours very
respectfully, Great
Investment Trust
Co. (Signed) Walter
Roberts Walter
Roberts Office
Manager What can we infer from the two letters
A. The Great Investment Trust Co.’s financial condition is very good.
B. Dodge Household Furniture Co.’s condition will be better in one
month.
C. If Dodge Household Furniture Co. pays back the money in three months,
they have to pay the quarter interest.
D. Great Investment Trust Co. wants Dodge Household Furniture Co. to borrow
more money.