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Ignoring Defaults, What Is the Approximate Effective Cost of Factoring

question 53

Multiple Choice

Ignoring defaults, what is the approximate effective cost of factoring if receivables are sold at a 4% discount and the average collection period is 2 months?


Definitions:

Synthesis

The process of combining simpler substances chemically to form more complex substances, often used in the context of producing new chemicals or materials.

Reagents

Substances used to cause chemical reactions or used in the synthesis of other substances.

Grignard Reagent

An organomagnesium compound used in organic chemistry for forming carbon-carbon bonds, represented by the formula RMgX, where R is an alkyl or aryl group and X is a halide.

Hydrolysis

A chemical reaction in which water breaks down another compound, splitting it into two or more substances.

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