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Poutine Cheez Company has yearly sales of $550,000 and an average collection period of 35 days....

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Advance Math

  1. Poutine Cheez Company has yearly sales of $550,000 and anaverage collection period of 35 days. A factoring company isoffering a 35-day receivables loan equal to 85% of the accountsreceivable at 9% along with a commission fee of .45% of thereceivables. The firm estimates that by taking the offer, it couldsave $300 in collection costs and a full half of one percent in baddebt costs, as a percentage of sales. What is the annual cost (inpercent) of the arrangement to Poutine Cheez?

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