Fred's Factory has credit sales of $747,500 and an average accounts receivable balance of $57,500. Fred factors his receivables throughout the year with his local bank at a 2% discount. What is the effective annual rate: of this arrangement? Multiple Choice 27.88% O 29.24% 28.67% 28.03% 30.04%

Fred's Factory has credit sales of $747,500 and an average accounts receivable balance of $57,500. Fred factors his receivables throughout the year with his local bank at a 2% discount. What is the effective annual rate: of this arrangement? Multiple Choice 27.88% O 29.24% 28.67% 28.03% 30.04%

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 14MC: Ancient Grains Unlimited has an accounts receivable turnover ratio of 3.34 times. The net credit...

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Fred's Factory has credit sales of $747,500 and an average accounts receivable balance of $57,500. Fred factors his receivables throughout the year with his local bank at a 2% discount. What is the effective annual rate
of this arrangement?
Multiple Choice
27.88%
29.24%
28.67%
28.03%
30.04%

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