What is the implicit effective annual interest rate

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Empire Corp sells its trade receivables to factors in order to get funding. Empire Corp has just signed an agreement to sells its trade receivables to Rebel Alliance at a 3.5% discount. The average collection is 3 months. What is the implicit effective annual interest rate on this factoring arrangement? You also learn that Empire Corp has just been told by Chewbacca and Associates that they could offer a 5% discount.

Reference no: EM132500789

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