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Find annualized percentage all-in cost of factoring option

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Reference no: EM131708584

Question: Sunny Coast Enterprises (B). Sunny Coast Enterprises has been approached by a factor that offers to purchase the Hong Kong Media Imports receivable at a 16% per annum discount plus a 2% charge for a nonrecourse clause.

a. What is the annualized percentage all-in cost of this factoring option?

b. What are the advantages and disadvantages of the factoring option compared to the options in Sunny Coast Enterprises (A)?

Reference no: EM131708584

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