A Firm Sells Its Accounts Receivable to a Factor at a 2

question 21

Multiple Choice

A firm sells its accounts receivable to a factor at a 2% discount.If the average collection period is 1 month, determine the effective annual rate of interest on the factoring.

• A)27.43%
• B)28.53%
• C)29.63%
• D)30.73%

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Definitions:

Antipsychotic Drugs

Drugs that help correct grossly confused or distorted thinking.

Mental Disorders

Health conditions characterized by significant changes in thinking, emotion, or behavior, associated with distress and impaired functioning.

Hospitalized

The act of admitting an individual to a hospital for treatment, observation, or other medical care.

Violent Behavior

Actions that involve force with the intent to injure, damage, or kill.