A company has a collection period of 33 days and factors all receivables immediately at a discount of 2.3 percent. What is the effective annual cost of borrowing? Assume 365 days per year. Multiple Choice 29.35% 27.01% 26.04% 28.60% 25.42%

A company has a collection period of 33 days and factors all receivables immediately at a discount of 2.3 percent. What is the effective annual cost of borrowing? Assume 365 days per year. Multiple Choice 29.35% 27.01% 26.04% 28.60% 25.42%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

A company has a collection period of 33 days and factors all receivables immediately at a discount of 2.3 percent. What is the effective annual cost of borrowing? Assume 365
days per year.
Multiple Choice
29.35%
27.01%
26.04%
28.60%
25.42%

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