For the year just ended, LuLus Pies had an average of $50 000 in accounts receivable. Credit
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For the year just ended, LuLu’s Pies had an average of $50 000 in accounts receivable. Credit sales were $500 000. LuLu’s factors its receivables by discounting them 3 per cent—in other words, by selling them for 97 cents on the dollar. What is the effective interest rate on this source of short-term financing?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781743768051
8th Edition
Authors: Stephen A. Ross, Rowan Trayler, Charles Koh, Gerhard Hambusch, Kristoffer Glover, Randolph W. Westerfield, Bradford D. Jordan
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