ABC Co. factored P100,000 accounts receivable to B Bank on a without recourse basis on January 1, 20X1. B Bank charged a 4% service fee and retained a 10% holdback to cover expected sales returns. In addition, B Bank charged a 12% interest on the average maturity of the receivables of 73 days over 365 days. How much is the total service and interest charges on factoring? 2,400 4,000 6,400 8,000

ABC Co. factored P100,000 accounts receivable to B Bank on a without recourse basis on January 1, 20X1. B Bank charged a 4% service fee and retained a 10% holdback to cover expected sales returns. In addition, B Bank charged a 12% interest on the average maturity of the receivables of 73 days over 365 days. How much is the total service and interest charges on factoring? 2,400 4,000 6,400 8,000

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 6P

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7. ABC Co. factored P100,000 accounts receivable to B Bank on a without recourse basis on January 1, 20X1. B Bank charged a 4% service fee and retained a 10% holdback to cover expected sales returns. In addition, B Bank charged a 12% interest on the average maturity of the receivables of 73 days over 365 days. How much is the net proceeds from the factoring? 100,320 88,300 85,600 83,600
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