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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Financing cost
Does financing cost include both overdraft and money tied up in inventory and receivables?
The financing cost is the interest cost of money.
Higher receivables and inventory will result in either a bigger overdraft (and therefore more interest payable) or less cash in the bank (and therefore the cost of receiving less interest than they would otherwise have received).
