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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