Fred's Factory Has Credit Sales of $747,500 and an Average

question 221

Multiple Choice

Fred's Factory has credit sales of $747,500 and an average accounts receivable balance of $57,500. Fred factors his receivables throughout the year with his local bank at a 2% discount. What is the effective annual rate of this arrangement?

• A) 27.88%
• B) 28.03%
• C) 28.67%
• D) 29.24%
• E) 30.04%

---

Definitions:

Glass Ceiling Effect

An invisible barrier that prevents minorities and women from advancing to the highest levels of leadership and management, regardless of their qualifications or achievements.

Leadership Positions

Positions of authority and responsibility where individuals guide, direct, and influence the work of others.

Minorities

Groups in a society distinguished by cultural, ethnic, racial, religious, or language characteristics, who hold fewer positions of power or have a smaller population compared to the dominant group.

Sex-Typical Roles

Represents the behavioral norms and expectations associated with one's biological sex in a given society.