Michaels Computers is evaluating proposals from two different factors who will provide receivables financing. Big...
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Michaels Computers is evaluating proposals from two different factors who will provide receivables financing. Big Fee Factoring will finance the receivables at an APR of 8 percent, discounted, and charges a fee of 4 percent. HighRate Factoring offers an APR of 14% (non-discounted) with fees of 2 percent. The average term of either loan is expected to be 35 days. With an average receivables balance of $250,000, which proposal should Michaels accept?
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