The Corner Store Factors All of Its Receivables Immediately at a Discount

question 92

Multiple Choice

The Corner Store factors all of its receivables immediately at a discount rate of 1.1 percent. The average collection period is 37.4 days and default is unlikely. What is the effective cost of borrowing?

• A) 10.24 percent
• B) 13.97 percent
• C) 15.82 percent
• D) 11.40 percent
• E) 12.58 percent

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Definitions:

Zero-Argument Constructor

A constructor in a class that takes no parameters, often used to create an instance of the object with default values.

GetMessage

A method typically associated with exceptions in Java, used to retrieve the detail message of the exception.

IOException

IOException is a type of exception in programming that occurs when an input/output operation fails or is interrupted.

Try/Catch Block

A try/catch block in programming languages like Java is used to handle exceptions, allowing the program to continue running even after encountering an error.