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What do you mean by weighted average time to maturity? What should be the answer for numbers 1,2? Problem 8-15 (AICPA Adapted) Brawny Company factored
What do you mean by weighted average time to maturity? What should be the answer for numbers 1,2?
Problem 8-15 (AICPA Adapted) Brawny Company factored P8,000,000 of accounts receivable to a finance entity at the beginning of the current year. Control was surrendered by Brawny Company. The factor assessed a fee of 5% and retained a holdback equal to 10% of the accounts receivable. In addition, the factor charged 15% interest computed on a weighted average time to maturity of the accounts receivable of 30 days. 1. What amount was initially received by Brawny Company from the factoring? a. 6,701,370 b. 6,800,000 c. 7,501,370 d. 6,700,000 Assuming all accounts receivable are collected, what is the loss on factoring? 400,000 b. 498,630 c. 898,630 d. 98,630 aStep by Step Solution
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