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Exercise 5: Hash Functions (i)

Consider this potential hash function: 

int hash(char *key, int N)
{
    int h = 0; char *c;
    for (c = key; *c != '\0'; c++)
        h = h + *c;
    return h % N;
}

How does this function convert strings to ints?

What are the deficiencies with this function and how can it be improved?