Smooth Yogurt, Inc

Multiple Choice

Smooth Yogurt, Inc. has average receivables of $80,000, which turn over once every 60 days.  It pledges all of its receivables to a bank that advances 80% of the total at 4% over prime and charges a 2% administrative fee on the total amount pledged.  If prime is 10.5%, what effective interest rate is Smooth paying for its receivables financing?

A) 6.0%
B) 14.5%
C) 15.0%
D) 29.5%