(Cet of factoring) MDM be considering factoring its receivables. The firm has credit sales of $400.000 per month and has an average receivables balance of $000,000 with 60-day credit terms The factor has offered to extend credit equal to 90 percent of the receivables factored less interest on the loan at a rate of 15 percent per month The 10 percent difference in the advance and the face value of all receivables factored consists of a 1 percent factoring fee plus a 9 percent reserve, which the factor maintains In addition #MDM inc decides to factor is receivables & will sell them all, so that it can reduce its credit department costs by $1,500 a month a What is the cost of borrowing the maximum amount of credt available to MOM bc theough the factoring agreement? Nole Assume a 30-day morth and 360 day year b. What considerations other than cost shid MOM Inc account be in determining whether to enter the factoring agreement) a. The cost of borrowing the maximum amount of credit available to MCM Inc. through the factoring agreement (Rond to two decimal places) (Cost of facturing) MDM Inc is considering factoring its receivables. The fis has credit sales of $400,000 per month and has an average recewables credit equal to 90 percent of the receivables factored less interest on the loan at a rate of 15 percent per month The 10 percent factoring fee phn a9 percent reserve, which the factor maintains in addition, if MOM inc decides to factor its recetrables will What is the cost of borrowing the maximum amount of credit available to MDM Inc through the factoring agreement? Node Assun b. What considerations other than cost should MOM inc account for in determining whether to enter the laching agreement COD a. The cost of borrowing the maximum amount of credit available to MDM in through the factoring agreement is Round to two decimal places) $800 000 150-day d torms The factor has offered d ables factored comits of a 500m (Cet of factoring) MDM be considering factoring its receivables. The firm has credit sales of $400.000 per month and has an average receivables balance of $000,000 with 60-day credit terms The factor has offered to extend credit equal to 90 percent of the receivables factored less interest on the loan at a rate of 15 percent per month The 10 percent difference in the advance and the face value of all receivables factored consists of a 1 percent factoring fee plus a 9 percent reserve, which the factor maintains In addition #MDM inc decides to factor is receivables & will sell them all, so that it can reduce its credit department costs by $1,500 a month a What is the cost of borrowing the maximum amount of credt available to MOM bc theough the factoring agreement? Nole Assume a 30-day morth and 360 day year b. What considerations other than cost shid MOM Inc account be in determining whether to enter the factoring agreement) a. The cost of borrowing the maximum amount of credit available to MCM Inc. through the factoring agreement (Rond to two decimal places) (Cost of facturing) MDM Inc is considering factoring its receivables. The fis has credit sales of $400,000 per month and has an average recewables credit equal to 90 percent of the receivables factored less interest on the loan at a rate of 15 percent per month The 10 percent factoring fee phn a9 percent reserve, which the factor maintains in addition, if MOM inc decides to factor its recetrables will What is the cost of borrowing the maximum amount of credit available to MDM Inc through the factoring agreement? Node Assun b. What considerations other than cost should MOM inc account for in determining whether to enter the laching agreement COD a. The cost of borrowing the maximum amount of credit available to MDM in through the factoring agreement is Round to two decimal places) $800 000 150-day d torms The factor has offered d ables factored comits of a 500m
