A company is considering two notes payable: Note A with a 5% interest rate and annual payments, and Note B with a 6% interest rate and semi-annual payments. Which note will have a greater impact on the company's cash flow in the first year?

• A. Both notes will have the same impact on cash flow.
• B. Neither note will impact cash flow in the first year.
• C. Note A, because it has a lower interest rate.
• D. Note B, because it requires more frequent interest payments.

Answer: (D)