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Hi sir could you please help me with Q no.2 from dec 2011 exam. The question is Bold Co.. I am struggling to do part c(ii) of the question which is asking us to calculate value of factor offer on a non-recourse basis. I have listened to the free lectures but still this question seems a bit difficult in terms of calculating the cost of factor offer on a non-recourse basis.
Thank you so much for your help in advance.
Regards
The only difference between ‘with recourse’ and ‘non-recourse’ is (as explained in the lecture) that if it is non-recourse then the business will have no irrecoverable debts so they save 0.9% of turnover, whereas if it is with-recourse they will still have irrecoverable debts (but they will fall, so they will save the difference of 0.3% of turnover).
Obviously the factors fee is different, but that should not proved a problem.
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