\The Delta Fish Hatchery Factors Its Accounts Receivables Immediately at a Discount

question 68

Multiple Choice

\The Delta Fish Hatchery factors its accounts receivables immediately at a discount rate of 1.2 percent. The average collection period is 36 days. Assume all accounts are collected in full. What is the effective annual interest rate on this arrangement?

• A) 13.02 percent
• B) 13.68 percent
• C) 12.09 percent
• D) 11.78 percent
• E) 12.79 percent

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Definitions:

Price Elasticity

A measure of how responsive the quantity demanded of a good is to a change in its price.

Demand Curve

The number of units of a product that people would be willing to purchase at different price levels.

Supply Curve

A graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period.

Substitute Choices

Options available that can replace or serve as alternatives to others, usually in the context of consumer goods or services.