Your firm has expected annual sales of $

2.4 million, and has been offered a merchant cash advance of $

490,000 with a factor rate of

1.10 and a holdback rate of

20%.

a. When do you expect the loan will be repaid, expressed in days?

b. What is the implied interest rate on the loan, expressed as an APR with daily compounding?

c. Suppose you are able to renegotiate the holdback rate to

15%. What is the implied interest rate now?