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A Firm Sells Its Accounts Receivable to a Factor at a 5

Question 23

Multiple Choice

A firm sells its accounts receivable to a factor at a 5% discount.If the average collection period is 1 month, determine the effective annual rate of interest on the factoring.


A) 90.06%
B) 85.06%
C) 80.06%
D) 75.06%

Correct Answer:

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