Z Petroleum Company is considering pledging its receivables to finance an increase in working capital. Citizens National Bank will lend the company 75 percent of the pledged receivables at 3 percentage points above the prime rate (currently 7%). The bank charges a service fee equal to 1.2 percent of the pledged receivables. The interest costs and the service fee are payable at the end of the borrowing period. Z has $2 million in receivables that can be pledged as collateral. The average collection period is 55 days. Assume that there are 365 days per year. Determine the annual financing cost to Z of this receivables-backed loan. Round your answer to two decimal places. %