A firm has an average collection period of 37 days and factors all of its receivables immediately at a discount of .98 percent.
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<u>Solution and Explanation:</u>
As per the income tax, if the income of a single taxpayer lies in the range of $65000 and $80000, the taxpayer is elgibile for a prtial deduction on his/her education on loan interest.
The partial interest deduction amount is calculated as follows:
Partial interest deduction allowed =
= $320
Therefore, the allowed interest deduction in this case is $320.