8.4 Suppose Savvy Fare sells a $1 million receivable to a factor. The receivable is due in six months. The factor charges an upfront fee of 4 percent for purchasing the receivable on a nonrecourse basis, and a factoring fee of 1 percent per month for every month the receivable is outstanding. The 1 percent per month factoring fee is paid at the time the receivables are sold to the factor. a. How much will Savvy Fare receive for its receivables? b. What is the all-in cost of the acceptance to Savvy Fare?
Solution ID:10137847 | Question answered on 16-Oct-2016
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