question (a) - calculate the cost and benefit under each option 1 & 2
DOUBT - in option 2 while calculating the increase in finance cost how did we get the figure 2310370 . the sales are 28m so should the increase in finance cost be
(28000000*0.8*(0.09-0.07))=448000 ?
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BPP KIT QUESTION 85 OSCAR COMPANY (SEPT/OCT 18)
4y ago#1The workings are shown in option 1 - the revised average receivables under both options are 30/365 x $28m.
sir whenever the factor advances us certain percentage of sales do we always calculate the interest on such advances using receivable figures? not sales figures?
4y ago#3Yes - do watch my free lectures on this.
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