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NEW QUESTION: 1
A company enters into an agreement with a firm who will factor the company's accounts receivable. The
factor agrees to buy the company's receivables, which average $100,000 per month and have an average
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company estimates that the company would save $18,000 in collection expenses over the year.
Fees and interest are not deducted in advance. Assuming a 360-day year, what is the annual cost of
financing?
A. 14.0 percent.
B. 17.5 percent.
C. 16.0 percent.
D. 12.0 percent.
Answer: B
Explanation:
Choice "d" is correct. 17.5% annual cost of financing.
NEW QUESTION: 2
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