Assume the Following Facts About a Firm That Borrows by Pledging

question 135

Multiple Choice

Assume the following facts about a firm that borrows by pledging its receivables: What is the effective cost of financing stated as an annual rate?

• A)23.5%
• B)13%
• C)13.5%
• D)16.83%

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Definitions:

Atkinson-Shiffrin Model

A theory of human memory that was proposed in the 1960s, suggesting that memory consists of three main components: sensory memory, short-term memory, and long-term memory.

Maintenance Rehearsal

A cognitive process involving the repetitive review of information to keep it in short-term memory for extended periods.

Repeating Items

The act of presenting the same content or material multiple times to improve memory retention or emphasize importance.

Allan Baddeley

A cognitive psychologist best known for his work on the model of working memory.