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Your firm has an average collection period of 28 days. Current practice is to factor all receivables immediately at a discount of 1.8 percent. Assume

Your firm has an average collection period of 28 days. Current practice is to factor all receivables immediately at a discount of 1.8 percent. Assume that default is extremely unlikely and that there are 365 days in a year. What is the effective cost of borrowing in this case?

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