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I was going really well until I saw the 80% of the revenue is paid upfront at interest of 7%, that would be a cost of roughly 1m, that confused me! What did everyone out for that?
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remember 80% apply to new receivable of 35days which is 7% interest cost and 20 % of the new receivable is still financed by 5% so you need to add both so that you can have total interest cost
Yes, 80% applied to receivables and this means: 26500000*0.8*35/360*{0.07-0.05}
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