Describe the concept of factoring accounts receivable.If necessary,conduct further research in a finance text to determine what functions a factor performs.

Consider the following factoring issues:

a. Why would a company sell its receivables to a factor?

b. If these receivables were 180 days old, why might a factor not be interested in purchasing them?

c. Who bears the risk in factoring? How can these risks be shifted?

d. What industries might use factoring more extensively (than other industries)?

e. Why wouldn’t a convenience store or a discount store be able to factor its accounts receivable, even if it had such receivables?.