1. ABC Company has an average collection period of 32 days and factors all of its receivables immediately at a 1.1 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

QUESTION

1. On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 1/9, net 39. What is the effective annual rate of interest for the credit period for this sale?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

QUESTION

1. Month Sales $ Month Sales $

Jan    45,450 July    42,870

Feb    29,949 Aug    34,840

Mar    34,840 Sep    45,450

Apr    42,870 Oct    34,840

May    45,450 Nov    29,949

June    29,949 Dec    42,870

2. Sales are collected as follows:

In the month of Sales: 34%

In the next month: 21%

After 2 months: 10%

After 3 months: remainder is collected

Calculate the cash collection for December.

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION

1. The terms of the sale were 2/9, net 56. What is the effective annual rate of interest?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.