Solution-What is the net annual costs of factoring

What is the net annual costs of factoring

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Question - A limited has forecast sales invoice at $300,000 per month. The average credit period for this type of business is two and half months. The company is considering factoring its accounts receivable under a full factoring agreement without recourse. Under the agreement, the factor will charge a fee of 2.5% on total invoicing. He will give an advance of 85% of invoiced at 13%. The agreement should enable A ltd avoid spending $95,000 on administrative costs. What is the net annual costs of factoring?

Reference no: EM132104668

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What is the net annual costs of factoring : The agreement should enable A ltd avoid spending $95,000 on administrative costs. What is the net annual costs of factoring

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What is the net annual costs of factoring

Reference no: EM132104668

Reference no: EM132104668

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