A Firm Sells Its $1,000,000 Receivables to a Factor for $960,000.Average

question 68

Multiple Choice

A firm sells its $1,000,000 receivables to a factor for $960,000.Average collection period is one month.The effective annual rate is:

• A) 27.43%.
• B) 48.00%.
• C) 60.10%.
• D) 63.21%.

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Definitions:

Cause-Effect Relationships

The principle stating that every effect in the natural world has a specific cause, and every cause leads to a specific effect.

The Experiment

A methodological approach in research to test hypotheses and establish causation by manipulating variables and observing the effects on a subject or system.

Correlational Research

A research methodology that examines the relationship between variables, determining how they may change together but not cause one another.

Positive Expectations

The belief that good things will happen in the future, which can influence behavior and attitudes in a positive way.