Question
subject :- Financial Services The annual turnover of Hydra Valves ltd. is Rs.75 lacs, of which 80% is on credit of one month. Factors Ltd.
subject :- Financial Services
The annual turnover of Hydra Valves ltd. is Rs.75 lacs, of which 80% is on credit of one month. Factors Ltd. is a factoring firm which is likely to give 90% of the bills raised on credit for a fee of 2% per month plus an additional commission of 3% on the total debt amounts which would result in the company saving Rs.60,000 annually in managing costs and avoidance of bad debts of 1% of credit sales. A bank is willing to give a credit facility of 90% of the debts at an annual interest rate of 15% with a processing fee of 2% of the debts. Which offer should be accepted?
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