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Sir i downloaded your suggested answer for f9 and matched Q3 factoring with mine.sir please guide me whether mine Q is wrong or still i get some marks for that.because i have compared both cost if factored and if not.please have a look.
IF NOT FACTORED:($000) $
F.cost: 26750×60/360×5% = 222917
Bad deb cost: 26750000×1% =267500
Administration cost = 50000
__________
Total cost if not factored = 540417
IF FACTORED:($000) $
F.cost: 26750×35/360×80%×7%=145639
F.cost: 26750×35/360×20%×5%= 26007
Bad debt:from abv 267500×30%= 80250
Factor fee: 26750×0.75% =200625
__________
Total cost if factored =452521
Benefit of factoring= $87896?
You would get full marks
There are several ways of setting out the workings but you get the same net benefit (the small difference is due to rounding).
Hello dear sir john i find this post very useful as my freind discuss,i also answered the factoring question like above except from fin cost for which i have taken 35 days instead of 60 days.my benefit of factoring is $13590.sir i want to ask whether i get some marks for this question as my answer is not matched with above. please have a look below
IF NOT FACTORED:($000) $
Fin.cost: 26750×35/360×5% = 148611
Bad deb cost: 26750×1% =267500
Administration cost = 50000
__________
Total cost if not factored = 466111
IF FACTORED:($000) $
F.cost: 26750×35/360×80%×7%=145639
F.cost: 26750×35/360×20%×5%= 26007
Bad debt:from abv 267500×30%= 80250
Factor fee: 26750×0.75% =200625
__________
Total cost if factored =452521
Benefit of factoring= $13590
ThanksYou are wrong in the first line of non-factoring because it should be 60 days and not 35.
However, since the rest of your calculations seem correct I would expect you to certainly get much more than half marks.
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