Your firm has an average collection period of 54 days


Your firm has an average collection period of 54 days. Current practice is to factor all receivables immediately at a 3 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: Your firm has an average collection period of 54 days
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