Dear sir,
I have a doubt in SFM problem,
how
"
cost of long term fund invested in debtors
"
is calculated in solution image
I
mean Rs 943.8 crores and Rs 882.42 crores for recourse/non recourse options under fine bank proposal
thank u advance
Regards,
vamshi
It is the total amount of advance received during the year:
(1,100 - 27.50) x 88% = 943.80,
(1,100 - 49.50) x 84% = 882.42.
"Cost of funds invested in debtors" is the interest cost on amount of debtors less advance received from factor, or on net debtors that remain due for 30 days.
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