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blakenordgaard blakenordgaard
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2 months ago
Poutine Cheez Company has yearly sales of $550,000 and an average collection period of 35 days. A factoring company is offering a 35-day receivables loan equal to 85% of the accounts receivable at 9% along with a commission fee of .45% of the receivables. The firm estimates that by taking the offer, it could save $300 in collection costs and a full half of one percent in bad debt costs, as a percentage of sales. What is the annual cost (in percent) of the arrangement to Poutine Cheez?
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
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DratiniDratini
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I appreciate what you did here, answered it right Smiling Face with Open Mouth
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Thanks for your help!!
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Correct Slight Smile TY
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