What is the effective cost of borrowing

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Your firm has an average collection period of 47 days. Current practice is to factor all receivables immediately at a discount rate of 3.5 percent. Assume that default is extremely unlikely. What is the effective cost of borrowing?

28.79 percent

36.20 percent

37.78 percent

40.97 percent

31.87 percent

Reference no: EM131285446

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