The A. B. Good Company sells electrical supplies to building contractors on terms of net 60. The firms average monthly sales are $100,000; thus, given the firms 2-month credit terms, its average receivables balance is $200,000. The firm pledges all of its receivables to a local bank, which in turn advances up to 70 percent of the face value of the receivables at 3 percent over prime and charges a 1 percent processing fee on all receivables pledged. A. B. Good follows a practice of borrowing the maximum amount possible, and the current prime rate is 6 percent. What is the APR of using this source of financing for a full year?

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