Your Firm Factors Its Accounts Receivables Immediately at a 2

question 29

Multiple Choice

Your firm factors its accounts receivables immediately at a 2% discount. The average collection period is 32 days. Assume that all accounts are collected in full. What is the effective annual interest rate on this arrangement?

• A) 25.9%
• B) 27.4%
• C) 29.3%
• D) 30.9%
• E) 31.3%

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Definitions:

Laying Proper Foundation

A legal term for introducing and providing preliminary evidence and showing its relevance and admissibility before the main evidence is presented.

Discovery Documents

Legal documents exchanged between parties in a lawsuit during the discovery phase, used to gather information in preparation for trial.

Legal Advice

Guidance provided by a qualified legal professional regarding the law or legal process in relation to a specific case or situation.

Accident Scene

An Accident Scene refers to the location where an accident has occurred, often marked and preserved for investigation to determine its causes and liabilities.