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January 22, 2018 at 1:46 pm
In example 1 where are getting the 100 dollars yet the annual sales figure is 12,000,000.
1 month=100 at a rate of 4 % dscount we will get 10*96%=$ 96
John Moffat says
January 23, 2018 at 7:43 am
The total sales are not relevant – we can’t force customers to take the discount, all we are trying to do is calculate the effective interest cost.
Do it on any number you like, and the answer will be the same. It is simply that $100 is an easy number to use.
August 22, 2017 at 5:12 am
In the notes it says “the factor advances 80% of the sales value immediately on invoicing”. But in the lecture you mentioned that only 20% is advanced immediately, can you please clarify this. Thank you.
August 22, 2017 at 8:35 am
The notes just give that as an example – the % is whatever is agreed with the factor. In the lecture I use a different illustration.
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