Question 2 A company is considering factoring as a way of managing its trade receivables. It currently has a balance outstanding on trade receivables of R 2 500 000. It has annual sales revenue of R 15 000 000 which occurs evenly throughout the year. Trade receivable are expected to continue at the same level for the next year. The factor will advance 80% of the invoiced sales and will charge interest at a rate of 10% per annum. Required: The interest charge for the next year payable to the factor will be: A. R50 000 B. R200 000 C. R300 000 D. R1 200 000
Question 2 A company is considering factoring as a way of managing its trade receivables. It currently has a balance outstanding on trade receivables of R 2 500 000. It has annual sales revenue of R 15 000 000 which occurs evenly throughout the year. Trade receivable are expected to continue at the same level for the next year. The factor will advance 80% of the invoiced sales and will charge interest at a rate of 10% per annum. Required: The interest charge for the next year payable to the factor will be: A. R50 000 B. R200 000 C. R300 000 D. R1 200 000
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...
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