December 2011 Question 2

If it is with recourse, then the bad debts fall from 0.9% to 0.6%, so a saving of 0.3% of turnover, which is 0.3% x 21.3M = 63,900

It it is without recourse then the factor bears all the bad debts and so the saving is the full 0.9% x 21.3M = 191,700
(or, depending on how you choose to set out the workings, an extra saving of 191,700 – 63,900 = 127,800).

Have you watched the free lectures on this, because with and without recourse factoring is explained, and also I work through a calculation involving factoring.