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?

Both notes will have the same impact on cash flow in year one.

Neither note will impact cash flow in the first year of operations.

Note A, because it has a lower interest rate than Note B.

Note B, because it requires more frequent interest payments.