Factoring: Pride, Ltd

question 21

Multiple Choice

Factoring: Pride, Ltd., sells $150,000 of its accounts receivable to factors at 2.875 per cent discount. The company's average collection period is 75 days. What is the simple annual interest cost of the factors loan?

• A) 35.5%
• B) 32.9%
• C) 27.8%
• D) 31.1%

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