[Ivorlyn]

Thats just the first part

[Ivorlyn]

Calculation 1: current situation
$
Credit controller 13,000
Interest cost of financing receivables (6% x $20,000) 1200.00
Irrecoverable debts (w1) 1684.61
15884.61

Working 1
This calculation is not quite so straightforward. The irrecoverable debts are
1.5% of sales, but there is no sales figure given. However, the information on
receivables allows the sales figure to be calculated:
20,000 x 365/65 = $112307.70
Therefore, the irrecoverable debts can be calculated as
1.5% x $112307.70 = $1684.61
Calculation 2: factoring company is used
$

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