Your firm has an average collection period of 32 days. Current practice is to factor all receivables

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Your firm has an average collection period of 32 days. Current practice is to factor all receivables immediately at a 1.5 percent discount. What is the effective cost of borrowing in this case? Assume that default is extremely unlikely.

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Fundamentals of corporate finance

ISBN: 978-0073382395

9th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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Question Posted: Dec 16, 2016 02:03 PM

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Your firm has an average collection period of 32 days. Current practice is to factor all receivables

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If we factor immediately we receive cash on an aver...View the full answer

Fundamentals of corporate finance

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