Multiple Choice
Ignoring defaults, what is the approximate effective cost of factoring if receivables are sold at a 2% discount and the average collection period is 1 month?
A) 19.40%
B) 24.00%
C) 26.53%
D) 27.40% $(100-98) /$98 = 2.04% per two-month period
Correct Answer:
Verified
Correct Answer:
Verified
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