A company has an average collection period of 34 days and, Ask an Expert

Finance

a. Company has an average collection period of 34 days and factors all of its receivables immediately at a 3.1 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing?

b. Identify which of the following will increase the operating cycle. Choose only one.

decrease in accounts payable turnover ratio

decrease in days' sales in inventory

Decrease in inventory turnover ratio

decrease in average collection period

decrease in accounts payable period

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91384493

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