What would be the average level of accounts receivable

Reference no: EM133659680

Question: The firm's bank has recently offered to lend the firm up to 80% of the average level of receivables. The bank would charge 9% per annum interest plus a 1% monthly processing charge per dollar of receivables lending. The firm extends terms of "net 60," and all customers who pay their bills do so by the 60th day. The firm borrows, on the average, $200,000 per month on its receivables. What would be the average level of accounts receivable if ABC Company would not factor their account receivables?

Reference no: EM133659680

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