Your firm has an average collection period of 34 days. Current practice is to factor all receivables

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Your firm has an average collection period of 34 days. Current practice is to factor all receivables immediately at a 2 per cent discount. What is the effective cost of borrowing in this case? Assume that default is extremely unlikely.

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Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

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Question Posted: Feb 22, 2024 03:02 AM

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Your firm has an average collection period of 34 days. Current practice is to factor all receivables

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Corporate Finance

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