A Firm Has an Average Collection Period of 35 Days

question 28

Multiple Choice

A firm has an average collection period of 35 days and factors all of its receivables immediately at a 0.95 percent discount.Assume all accounts are collected in full.What is the firm's effective cost of borrowing?

• A)9.98 percent
• B)10.13 percent
• C)10.24 percent
• D)10.38 percent
• E)10.47 percent

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Definitions:

Working Memory

A cognitive system responsible for the temporary holding and processing of information needed for complex cognitive tasks like learning, reasoning, and comprehension.

Sensory Memory

The shortest-term element of memory which acts as a buffer for stimuli received through the senses.

Memory Skill

The ability to encode, store, and retrieve information effectively from one's mind.

Cognitive Development

The process by which individuals perceive, think, and gain understanding of their world through the interaction of genetic and learned factors.