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What amount of cash will the firm receive

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Question - A firm that often factors its accounts receivable has an agreement with its finance company that requires the firm to maintain a 6% reserve and charges 1% commission on the amount of receivables. The net proceeds would be further reduced by an annual interest charge of 10% on the monies advanced. Assuming a 360-day year, what amount of cash (rounded to the nearest dollar) will the firm receive from the finance company at the time a P100,000 account that is due in 90 days is turned over to the finance company?

A. P83,700 C. P90,675

B. P90,000 D. P93,000

Reference no: EM133183339

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