What is the effective cost of borrowing in this case

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Your firm has an average collection period of 22 days. Current practice is to factor all receivables immediately at a discount of 1.2 percent. Assume that default is extremely unlikely and that there are 365 days in a year.

What is the effective cost of borrowing in this case? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Effective cost %?

Reference no: EM131973723

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