De la Mare Company has $140,000 in accounts receivable that will be collected within 75 days. Since De la Mare needs cash immediately, it has decided to factor in them and has received $130,000. Donne Factoring Company, which took the receivables, could collect only $135,000 after 90 days. Find the rate of return on this investment for Donne.
De la Mare Company has $140,000 in accounts receivable that will be collected within 75 days. Since De la Mare needs cash immediately, it has decided to factor in them and has received $130,000. Donne Factoring Company, which took the receivables, could collect only $135,000 after 90 days. Find the rate of return on this investment for Donne.
Chapter17: The Management Of Cash And Marketable Securities
Section: Chapter Questions
Problem 2P
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Please provide this question solution general accounting
Transcribed Image Text:De la Mare Company has $140,000 in accounts receivable that will
be collected within 75 days. Since De la Mare needs cash
immediately, it has decided to factor in them and has received
$130,000.
Donne Factoring Company, which took the receivables, could collect
only $135,000 after 90 days.
Find the rate of return on this investment for Donne.
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