Question
Your firm has an average collection period of 34 days. Current practice is to factor all receivables immediately at a 2 percent discount. Required: What
| Your firm has an average collection period of 34 days. Current practice is to factor all receivables immediately at a 2 percent discount. |
| Required: |
| What is the effective cost of borrowing in this case? Assume that default is extremely unlikely. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
| Effective annual rate | % |
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Financial Management In The Sport Industry
Authors: Matthew T Brown, Daniel Rascher, Mark S Nagel, Chad Mcevoy
1st Edition
1934432040, 978-1934432044
