Question 2 A company is considering factoring as a way of managing its trade receivables. It currently has a balance outstanding on trade receivables of R 2 500 000. It has annual sales revenue of R 15 000 000 which occurs evenly throughout the year. Trade receivable are expected to continue at the same level for the next year. The factor will advance 80% of the invoiced sales and will charge interest at a rate of 10% per annum. Required: The interest charge for the next year payable to the factor will be: A. R50 000 B. R200 000 C. R300 000 D. R1 200 000

Question 2 A company is considering factoring as a way of managing its trade receivables. It currently has a balance outstanding on trade receivables of R 2 500 000. It has annual sales revenue of R 15 000 000 which occurs evenly throughout the year. Trade receivable are expected to continue at the same level for the next year. The factor will advance 80% of the invoiced sales and will charge interest at a rate of 10% per annum. Required: The interest charge for the next year payable to the factor will be: A. R50 000 B. R200 000 C. R300 000 D. R1 200 000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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