Your small business has been very successful and has amassed a ...

[nautica902]

Your small business has been very successful and has amassed a large amount of accounts receivable from reputable firms, but you find yourself short of ready cash to replace inventory. How could a factor help you?

Question 2

Frederick W. Taylor originated the theory of satisfaction and dissatisfaction.
 
 Indicate whether the statement is true or false

[blakcmamba]

Answer to Question 1

A factor, a firm that specializes in buying other firms' accounts receivables, may buy the accounts receivables for an amount less than the face value. This short-term financing method provides money to a firm that is willing to sell its accounts receivable and is in need of funds to purchase inventory or to pay for other short-term financial needs. Factoring also provides the factor with the chance to earn a profit. In this case, profit is based on the risk the factor assumes. For a factor, risk is the probability that the accounts receivable will be repaid when they mature. Generally, the amount of profit the factor receives is the difference between the amount collected at maturity and the amount the factor paid for the accounts receivable.

Answer to Question 2

False