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The Clear Water Company would be permitted to borrow up to 65% of its current account receivables balance of $750,000 for 90 days. The annual
The Clear Water Company would be permitted to borrow up to 65% of its current account receivables balance of $750,000 for 90 days. The annual interest rate would be 12 percent due at maturity. The lender also charges a service fee of 2% of the account receivables balance, which is due at the time of borrowing agreement and NOT at maturity. What is annual cost of financing for Clear Water?
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