Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
A factoring company has offered a one-year agreement with Glub Ltd to both manage its debtors and advanced 80 per cent of the value of all its invoices immediately a sale is invoiced. Existing invoices will be eligible for an immediate 80 per cent cash payment.
The annual sales on credit of Glub are Rs6M spread evenly through the year and the average delay in payment from the invoice date is at present 80 days. The factoring company is confident of reducing this delay to only 60 days and will pay the remaining 20 per cent of invoice value to Glub immediately on receipt from the customer.
The charge for debtor management will be 1.7 per cent of annual credit turnover payable at the year-end. For advance payment on he invoices a commission of 1 per cent will be charged plus interest applied at 10 per cent per annum on the gross funds advanced.
Glub will be able to save Rs80, 000 during this year in administration costs if the factoring company takes on the debtor management. At the moment it finances its trade credit through an overdraft facility with an interest rate of 11 per cent.
Required
Advise Glub on whether to enter into the agreement. Discuss the relative advantages and disadvantages of overdraft, factoring and term loan financing.
Case Study: Silicon Cliffs is a big private company that undertakes consultancy activities and services in the field of building construction. Silicon Cliffs has gained peoples
Explain the structure of financial systems In direct finance borrower-spenders borrow funds straight from lenders in the financial markets by selling them securities. In indire
Q. Explain the Adjusting Journal Entry? Adjusting Journal Entry - An accounting entry made into a subsidiary ledger known as the Generaljournal to account for a periods changes
The Role of Merchant Banker The issuer appoints the Merchant Banker (or Investment Banker) to undertake the issue activity. A Merchant Banker performs multiple functions during
1. Capital Asset Pricing Model and Multinational Corporations Why do some critics say the CAPM model is not appropriate in an international setting? Please explain a way that
What is the difference between business risk and financial risk? Business risk considers to the uncertainty a company has regarding to its operating income (as well termed as ear
Joe and Sam each invested $20,000 in the stock market. Joe's investment increased in value by 5% per year for 10 years. Sam's investment decreased in value by 5% for 5 years and th
What are some of the primary advantages when a corporation has operations in countries other than its home country? What are some of the risks? Foreign operations may decrease
Hedge Fund Indices Substantial increase in the use of Hedge Funds in recent times has created demand for appropriate indices that can offer a good tool to assess and benchmark
the salaries paid in 2004 is rs 500000 outstanding is rs 20000 salaries paid in advance for 2004 is rs 30000 what is the actual salary expenditure for 2004 which accounting princip
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd