Let’s also add the following assumptions:
· Cost of goods sold is 70% of revenues.
· Line of credit from bank is $500ꯠ.
Consider what an inadequately financed contract packager can do by factoring 50% of its eligible receivables. The company’s factoring cost is 4% of the sales invoice.
Let’s also add the following assumptions:
· Cost of goods sold is 70% of revenues.
· Line of credit from bank is $500ꯠ.