What is the cost of financing the trade receivables balance


Question: A company has annual sales revenue of $2m, 10% of which are cash sales with the remainder on credit. Credit customers take between 10 and 30 days to pay, with an average receivable time of 22 days. Overdraft interest is payable at 7% per year. What is the cost of financing the trade receivables balance? Give your answer to the nearest whole dollar. Do not include symbols, commas or letters in your response.

 

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Accounting Basics: What is the cost of financing the trade receivables balance
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