Assume default is extremely unlikely-effective annual rate

Assignment Help Financial Management

Reference no: EM131047836

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 ______ %

Reference no: EM131047836

Questions Cloud

Develop methods for establishing a constructive structure : Develop and implement methods for establishing a constructive organizational structure and culture that fosters positive employee and employer relationships.

Outpatient surgery to remove a bunion on her foot : Ashley has an individual medical expense insurance policy with a $1000 calendar-year deductible and a 20 percent coinsurance clause. Ashley had outpatient surgery to remove a bunion on her foot and incurred medical bills of $10,000. How much will ..

What is the velocity of a wave on this bungee cord : What is the velocity of a wave on this bungee cord?

Provide a brief description about the organisation : Choose an organisation and provide a brief description about the organisation. Consider/discuss how the organisation is structured to achieve its purpose and objectives

Assume default is extremely unlikely-effective annual rate : 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 n..

Which block oxygen from reaching the burning material : Liquid water extinguishes a flame two ways one by absorbing much of the heat that the fire needs to sustain itself and two by wetting, which block oxygen from reaching the burning material.

Each insurer contribute toward this claim : Assume that a $300,000 liability claim is covered under two liability insurance contracts. Policy A has a $500,000 limit of liability for the claim, while Policy B has a $125,000 limit of liability. Both contracts provide for contribution by equal..

Considering change in credit policy to terms : Essence of Skunk Fragrances, Ltd., sells 6,100 units of its perfume collection each year at a price per unit of $391. All sales are on credit with terms of 3/30, net 60. The discount is taken by 50 percent of the customers. What is the amount of the ..

How a real-life company utilizes materials from the chapter : Using your own words, discuss how a real-life company/organization utilizes materials (managerial or analytical) from the assigned chapter.

User Account

All Pages