Pharoah, Inc., sells $287,000 of its accounts receivable to factors at a 5 percent discount. The firms average collection period is 90 days.

What is the dollar cost of the factoring service?

1. Dollar cost of factoring? ( per month)

2. Dollar cost over 90 days ?

3.What is the simple annual interest cost of the loan?

4.What is the effective annual interest cost of the loan?

Dollar cost over 90 days

Dollar cost of factoring