Assume the Following Facts About a Firm That Borrows by Pledging

question 156

Multiple Choice

Assume the following facts about a firm that borrows by pledging its receivables $\begin{array}{ll}\text { Average balance of accounts receivable }&\$50,000\\\text { Annual receivables turnover ( } 360 / \mathrm{ACP}) & 6 \mathrm{x} \\\text { Administrative fee charged on all new receivabless } & 1\% \\\text { Interest rate on outstandingloans } & 12 \% \\\text { Percent of receivables accepted } & 75 \%\end{array}$ What is the effective cost of financing stated as an annual rate?

• A) 23.5%
• B) 20.0%
• C) 13.0%
• D) 16.8%

Learn about the use of pay policy lines and their limitations in reflecting labor market conditions.

Understand the strategic implications of paying more for labor to attract top talent and support a company's competitive strategy.

Identify the most common applications of pay ranges across different job types and industries.

Grasp the significance of pay policies in shaping desired employee behaviors and organizational outcomes.

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