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How to calculate Finance Saving on reduced Receivables

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How to calculate Finance Saving on reduced Receivables

A company's turnover is $30,000, receivable day is 48 (STD 30 days), bad debt is 3%, overdraft interest charge is 8%. However, when the company started to use a factor with non resource agreement, receivable day reduce to 38 days, and bad debt reduce to 2%, also factor lend 80% outstanding receivables to the company, but overdraft interest charge increase by 1%. What is finance saving on reduced receivables?

October 1st 2016 AN ACCA USER 250 Points

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