Your fiRm Factors Its Accounts Receivables Immediately at a 2

question 169

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:

Vitamin D Deficiency

A condition resulting from inadequate levels of vitamin D in the body, which is essential for healthy bones, immune function, and reducing the risk of chronic diseases.

Nutritional Deficiency

The lack of essential nutrients in the diet, leading to health problems and diseases.

Fissures

Small tears or splits in the skin or mucous membrane, often causing pain and discomfort.

Inflammation

A biological response of body tissues to harmful stimuli, such as pathogens, damaged cells, or irritants, characterized by redness, swelling, heat, and pain.