Once Upon a Credit offers retail store credit card programs to its customers. It has an ongoing practice of factoring its receivables to maximize cash on hand so that it can keep expanding its credit program to its customers. Assuming that their factoring is all done on a without recourse basis, which option provides the most cash immediately on a $300,000 receivable. i. Finance Charge 2% and Holdback of 4% ii. Finance Charge 4% and Holdback of 5% iii. Finance Charge 5% and Holdback of 2% iv. Finance Charge 5% and Holdback of 5%
Once Upon a Credit offers retail store credit card programs to its customers. It has an ongoing practice of factoring its receivables to maximize cash on hand so that it can keep expanding its credit program to its customers. Assuming that their factoring is all done on a without recourse basis, which option provides the most cash immediately on a $300,000 receivable. i. Finance Charge 2% and Holdback of 4% ii. Finance Charge 4% and Holdback of 5% iii. Finance Charge 5% and Holdback of 2% iv. Finance Charge 5% and Holdback of 5%
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 11MC: Which of the following best represents a positive product of a lower number of days sales in...
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Once Upon a Credit offers retail store credit card programs to its customers. It has an ongoing practice of factoring its receivables to maximize cash on hand so that it can keep expanding its credit program to its customers. Assuming that their factoring is all done on a without recourse basis, which option provides the most cash immediately on a $300,000 receivable.
i. Finance Charge 2% and Holdback of 4%
ii. Finance Charge 4% and Holdback of 5%
iii. Finance Charge 5% and Holdback of 2%
iv. Finance Charge 5% and Holdback of 5%
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