A firm sells its accounts receivables to a factor at a 1.7% discount. The average collection period is 3 month. a. What is the effective annual interest rate on this arrangement? (Round your answer to 2 decimal places.) Effective annual rate b. What is the implicit effective annual interest rate if the average collection period is 4 months? (Round your answer to 2 decimal places.) Effective annual rate
A firm sells its accounts receivables to a factor at a 1.7% discount. The average collection period is 3 month. a. What is the effective annual interest rate on this arrangement? (Round your answer to 2 decimal places.) Effective annual rate b. What is the implicit effective annual interest rate if the average collection period is 4 months? (Round your answer to 2 decimal places.) Effective annual rate
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 15MC: Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual...
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