angel co. has P500,000 in receivable that carries a 30-day credit term, 2% factor’s fee, 5% holdback reserve, and an interest of 12% per annum on advances. Use 360 days. What is the effective annual financing cost of factoring?

angel co. has P500,000 in receivable that carries a 30-day credit term, 2% factor’s fee, 5% holdback reserve, and an interest of 12% per annum on advances. Use 360 days. What is the effective annual financing cost of factoring?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 22P

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