Ignoring Defaults,what Is the Approximate Effective Cost of Factoring If

question 28

Multiple Choice

Ignoring defaults,what is the approximate effective cost of factoring if receivables are sold at a 2% discount and the average collection period is 1 month?

• A) 19.40%
• B) 24.00%
• C) 26.53%
• D) 27.40%

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Definitions:

Cimabue

An Italian painter and designer from the late 13th century, considered one of the last great Italian artists in the Byzantine style.

Late Gothic

A style of Gothic architecture and art that developed in the late Middle Ages, characterized by elaborate decorations, intricate designs, and the use of flying buttresses.

Doge's Palace

A historic Venetian palace in Italy, once the residence of the Doge of Venice, known for its Gothic architecture and position overlooking the Grand Canal.

Venice

A city in northeastern Italy, famed for its canals, Gothic and Renaissance architecture, and as a center for trade and the arts during the Renaissance.