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Chris M.
Chris M., M.S.W. Social Work
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Tom Corp. factors $200,000 of accounts receivable in a transaction

Customer Question

Tom Corp. factors $200,000 of accounts receivable in a transaction in which control is surrendered and without recourse to Rich Corp. on July 1, 2009. Rich assessed a fee of 3% and retains a holdback equal to 5% of the accounts receivable. In addition, Rich charged 15% interest computed on a weighted-average time to maturity of the receivables of 41 days.

Taylored's cost of factoring the receivables would be
A. $19,370
B. $10,000
C. $ 3,370
D. $ 9,370
Submitted: 6 years ago.
Category: Homework
Expert:  Chris M. replied 6 years ago.

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