1. ABC Company has an average collection period of 32 days and factors all of its receivables immediately at a 1.1 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing?
Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
QUESTION
1. On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 1/9, net 39. What is the effective annual rate of interest for the credit period for this sale?
Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
QUESTION
1. Month Sales $ Month Sales $
Jan 45,450 July 42,870
Feb 29,949 Aug 34,840
Mar 34,840 Sep 45,450
Apr 42,870 Oct 34,840
May 45,450 Nov 29,949
June 29,949 Dec 42,870
2. Sales are collected as follows:
In the month of Sales: 34%
In the next month: 21%
After 2 months: 10%
After 3 months: remainder is collected
Calculate the cash collection for December.
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
QUESTION
1. The terms of the sale were 2/9, net 56. What is the effective annual rate of interest?
Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.