12. The Bone Company has been factoring its accounts receivable for the past 5 years. The factor...
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12. The Bone Company has been factoring its accounts receivable for the past 5 years. The factor charges a fee of 2 percent and will lend up to 80 percent of the volume of receivables purchased for an additional 1.5 percent per month.
The firm typically has sales of $500,000 per month, 70 percent of which are on credit. By using the factor, two savings are effected:
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