This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Bonneau Sunglass Co. is considering the factoring of its receivables. The firm has credit sales of ... (Read 349 times)

sheilaspns

  • Hero Member
  • *****
  • Posts: 567
on: May 1, 2019
Bonneau Sunglass Co. is considering the factoring of its receivables. The firm has credit sales of $500,000 per month and has an average receivables balance of $1,000,000 with 60-day credit terms. The factor has offered to extend credit equal to 85% of the receivables factored less interest on the loan at a rate of 2% per month. The 15% difference in the advance and face value of all receivables factored consists of a 2% factoring fee plus a 13% reserve, which the factor maintains. In addition, if Bonneau decides to factor its receivables, it will sell them all, so that it can reduce its credit costs by $2,000 a month.

a.What is the cost of borrowing the maximum amount of credit available to Bonneau through the
factoring agreement?

b.What considerations other than cost should be accounted for by Bonneau in determining
whether or not to enter the factoring agreement?
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by sheilaspns on May 1, 2019

onowka

  • Sr. Member
  • ****
  • Posts: 353
Reply #1 on: May 1, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 32% of students answer this correctly


sheilaspns

  • Member
  • Posts: 567
Reply 2 on: May 1, 2019
:D TYSM

CAPTAINAMERICA

  • Member
  • Posts: 325
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

Alcohol acts as a diuretic. Eight ounces of water is needed to metabolize just 1 ounce of alcohol.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

A good example of polar molecules can be understood when trying to make a cake. If water and oil are required, they will not mix together. If you put them into a measuring cup, the oil will rise to the top while the water remains on the bottom.

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

Did you know?

Adult head lice are gray, about ? inch long, and often have a tiny dot on their backs. A female can lay between 50 and 150 eggs within the several weeks that she is alive. They feed on human blood.

Defibrillator. Defibrillators are devices that supply a voltage charge to the heart in the hope of r Defibrillator. Defibrillators are devices that supply a voltage charge to the heart in the hope of r
J. P. Morgan, the financial genius, staved off ruinous competition among steel firms by combining mo J. P. Morgan, the financial genius, staved off ruinous competition among steel firms by combining mo
Gently squeeze/milk the arm with twisting motion. With oil or lotion on hands, use gentle but firm ... Gently squeeze/milk the arm with twisting motion. With oil or lotion on hands, use gentle but firm ...
Management Information Systems: Managing the Digital Firm, 15th Edition Management Information Systems: Managing the Digital Firm, 15th Edition
Factoring Polynomials Factoring Polynomials
Factoring Factoring
Video: Hormones and the menstrual cycle Animation

For a complete list of videos, visit our video library