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 490 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
Wow, this really help

milbourne11

  • Member
  • Posts: 322
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

In 1886, William Bates reported on the discovery of a substance produced by the adrenal gland that turned out to be epinephrine (adrenaline). In 1904, this drug was first artificially synthesized by Friedrich Stolz.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

Never take aspirin without food because it is likely to irritate your stomach. Never give aspirin to children under age 12. Overdoses of aspirin have the potential to cause deafness.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

It is difficult to obtain enough calcium without consuming milk or other dairy foods.

Rebound Tenderness, Apply Firm Pressure to the Abdomen Rebound Tenderness, Apply Firm Pressure to the Abdomen
In 2013, Americans learned that the federal government massively surveys their phone calls and e-mai In 2013, Americans learned that the federal government massively surveys their phone calls and e-mai
Neck stretch. Rest the receiver’s head on the palm of your right hand, taking a firm hold on the ... Neck stretch. Rest the receiver’s head on the palm of your right hand, taking a firm hold on the ...
How to solve any rational equation by factoring (Part 1) How to solve any rational equation by factoring (Part 1)
Factoring Cubics Factoring Cubics
Expanding, simplifying, and factoring quadradtics Expanding, simplifying, and factoring quadradtics
Video: Introduction to Breast Cancer

For a complete list of videos, visit our video library