Firm effective interest rate paid on receivables financing

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Reference no: EM13938815

For the year just ended, a firm had average accounts receivable of $90,000 and total credit sales of $700,000. Throughout the year, a factor purchased accounts receivable from the firm at a 1.5% discount. What was the firm’s effective interest rate paid on its receivables financing?

a. 8.6% b. 10.9% c. 11.9% d. 12.5% e. 13.2%

Reference no: EM13938815

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