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Wildhorse, Inc., sells $224,000 of its accounts receivable to factors at a 2 percent discount. The firms average collection period is 90 days.
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What is the dollar cost of the factoring service? (Round answers to nearest whole dollar, e.g. 5,275.)
| Dollar cost of factoring | | $enter the cost of factoring per month in dollars rounded to the nearest whole | per month |
| Dollar cost over 90days | | $enter the cost of factoring over 90 days in dollars rounded to the nearest whole | |
What is the simple annual interest cost of the loan? (Do not round itermediate calculations. Round answer to 1 decimal place, e.g. 15.1%.)
| Simple annual interest cost | | enter the simple annual interest cost in percentages rounded to 1 decimal place % |
What is the effective annual interest cost of the loan? (Round answer to 2 decimal places, e.g. 15.25%.)
| Effective annual interest cost | | enter the effective annual interest cost in percentages rounded to 2 decimal places % |
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