Your Firm Factors Its Accounts Receivable Immediately at a 3

question 50

Multiple Choice

Your firm factors its accounts receivable immediately at a 3% discount. The average collection period is 41.95 days. Assume that all accounts are collected in full. What is the effective annual interest rate on this arrangement?

• A) 27.9%
• B) 30.3%
• C) 31.7%
• D) 32.9%
• E) 34.3%

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Definitions:

Social Responsibility Strategy

A company's approach to managing its business processes to produce an overall positive impact on society.

Leadership Role

The position or responsibility of guiding and influencing individuals or groups towards achieving a common goal.

Social Issues

Problems that influence a considerable number of individuals within a society, reflecting group conflicts and challenges.

Obstructionist Strategy

Avoids social responsibility and reflects mainly economic priorities.