Question
High Living Inc.'s average collection period is 55 days with a 4% probability of default. The company factors all receivables immediately at a 13% discount.
High Living Inc.'s average collection period is 55 days with a 4% probability of default. The company factors all receivables immediately at a 13% discount.
What is the effective annual cost of factoring (APR)?
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Finance for Executives Managing for Value Creation
Authors: Gabriel Hawawini, Claude Viallet
4th edition
9781133169949, 538751347, 978-0538751346
