What is the effective cost of borrowing in case

Assignment Help Financial Management

Reference no: EM131072778

Your firm has an average collection period of 24 days. Current practice is to factor all receivables immediately at a discount of 1.4 percent.

What is the effective cost of borrowing in this case? (Do not round intermediate calculations. Enter your answer as a pecent rounded to 2 decimal places, e.g., 32.16.)

Effective cost %

Reference no: EM131072778

Questions Cloud

What would be the cost of the protective put portfolio : You would like to be holding a protective put position on the stock of XYZ Co. to lock in a guaranteed minimum value of 60 at year-end. XYZ currently sells for 60. How much would it cost to purchase if the desired put option were traded? What would b..

Leading innovator in the telecommunications industry : "It seemed like a real ego booster when I got to take over my boss's job during his vacation," thought Dave Peterson. "Now I'm not so sure. Both Seamus and Jeremy really want to be in charge of this new project. I have to decide between them and I..

Comparing two savings accounts : You are comparing two savings accounts. Account A has an APR of 4.65 percent and an EAR of 4.75 percent. Account B has an APR of 4.70 percent and an EAR of 4.70 percent. Given this, you should invest in account:

Define appropriate vectors, and restate the problem : Define an appropriate matrix, and restate the problem using the phrase "columns of A."

What is the effective cost of borrowing in case : Your firm has an average collection period of 24 days. Current practice is to factor all receivables immediately at a discount of 1.4 percent. What is the effective cost of borrowing in this case?

What should be the value of the put : A put option on a stock with a current price of $42 has an exercise price of $44. The price of the corresponding call option is $3.60. According to put-call parity, if the effective annual risk-free rate of interest is 6% and there are four months un..

What is its operating roa : A firm has an ROE of 3%, a debt/equity ratio of 0.7, a tax rate of 30%, and pays an interest rate of 9% on its debt. What is its operating ROA?

Personal creativity inventory to introduction : This inventory provides you the opportunity to assess, reflect on, and reduce possible personal barriers to creativity. For each of the statements in the inventory, use the following scale to express which number best corresponds to your agreement..

Assess the profitability of capital budgeting projects : Northwest Utility Company faces increasing needs for capital. Fortunately, it has an Aa3 credit rating. The corporate tax rate is 40 percent. Northwest’s treasurer is trying to determine the corporation’s current weighted average cost of capital in o..

User Account

All Pages