Question
Your firm has an average collection period of 25 days. Current practice is to factor all receivables immediately at a discount of 1.5 percent. Assume
Your firm has an average collection period of 25 days. Current practice is to factor all receivables immediately at a discount of 1.5 percent. Assume that default is extremely unlikely.
What is the effective cost of borrowing?(Do not round intermediate calculations and enter your answer as a pecent rounded to 2 decimal places, e.g., 32.16.)
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Financial Institutions Management A Risk Management Approach
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
8th edition
978-0078034800, 78034809, 978-0071051590
