Your fiRm Factors Its Trade Receivables Immediately at a 3

question 105

Multiple Choice

Your firm factors its trade receivables immediately at a 3% discount.The average collection period is 41.95 days.Assume that all accounts are collected in full.What is the effective annual interest rate
On this arrangement?

• A)29.9%
• B)30.3%
• C)30.7%
• D)30.9%
• E)31.3%

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Definitions:

Middle Manager

A managerial position that bridges the gap between the executive level and the operational staff within an organization.

Organization Change

Refers to the process through which organizations transform their structure, strategies, operational methods, or culture to adapt to changes in the external environment or to improve internal efficiency.

Executive Edit

The process of making revisions or decisions by a senior editor or executive, particularly in publishing or content creation.

Role Model

A person whose behavior, example, or success is or can be emulated by others, especially by younger people.