Your Firm Has an Average Collection Period of 52 Days

question 105

Multiple Choice

Your firm has an average collection period of 52 days.Current practice is to factor all receivables immediately at a 2.2 percent discount.What is the effective cost of borrowing in this case? Assume that default is extremely unlikely.

• A)16.12 percent
• B)16.18 percent
• C)16.90 percent
• D)17.53 percent
• E)17.59 percent

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Definitions:

Active Listening

A technique of listening with all senses, as a way to ensure understanding, empathy, and engagement during communication.

Eye Contact

The act of looking directly into another person's eyes, often used as a form of nonverbal communication.

Open-Ended Response

A type of answer that allows for a free-form response, encouraging detailed and expressive replies.

Hip Pain

Discomfort located in or around the hip joint, often caused by arthritis, injury, pinched nerves, or other conditions.