Poutine Cheez Company has yearly sales of $550,000 and an average collection period of 35 days....

Poutine Cheez Company has yearly sales of $550,000 and an average collection period of 35 days. A factoring company is offering a 35-day receivables loan equal to 85% of the accounts receivable at 9% along with a commission fee of .45% of the receivables. The firm estimates that by taking the offer, it could save $300 in collection costs and a full half of one percent in bad debt costs, as a percentage of sales. What is the annual cost (in percent) of the arrangement to Poutine Cheez?

Expert Solution

Colby Messinger answered 2 years ago

A firm has days' sales in an inventory of 105 days, an average collection period of...

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Zane Corporation has an inventory conversion period of 63 days, an average collection period of 33...

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CASH CONVERSION CYCLE Zane Corporation has an inventory conversion period of 52 days, an average collection...

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Mr. Husker’s Tuxedos Corp. ended the year 2021 with an average collection period of 36 days....

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