Question

Moksha International has a total sale of Rs.100 lacs, of which 75% is on credit. The average collection period is 80 days. The past experience indicates that bad debt losses are around 1.5% of the credit sales. The firm spends about Rs.1,50,000 per annum to administer its credit sales. These are avoidable as a pay advance against receivables to the firm at an interest rate of 18% after withholding 10% as reserve. (Assume 360 day year)


Question 21:- What is the total credit Sales of Moksha International?
a) Rs. 80 lacs
b) Rs. 75 lacs
c) Rs. 70 lacs
d) Rs. 65 lacs


Question 22:- What are the Average Receivables?
a) Rs. 80,00,000
b) Rs. 22,22.222
c) Rs. 16,66,667
d) Rs. 13,89,990


Question 23:- What is the disbursable amount to the firm by the factor?
a) Rs. 16,66,667
b) Rs. 14,58,333
c) Rs. 16,58,999
d) Rs. 18,92,992


Question 24:- What is the Total Interest Chargeable by the factor?
a) Rs. 58,333
b) Rs. 41,667
c) Rs. 1,66,667
d) Rs. 83,192


Question 25:- What is the Effective Cost of Factoring?
a) 4.23%
b) 3.51%
c) 6.54%
d) 2.86% ​

Answer 1

Explanation:

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Answer 2

Answer:

Question 21-b-75 lacs

Explanation:

Question 21-b-75 lacs