Explore BrainMass
Share

factoring department of Inter American Bank (IAB)

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

The factoring department of Inter American Bank (IAB) is processing 100,000 invoices per year with average invoice value of $1,500. IAB buys the accounts receivable at 4 percent off the invoice value. The average collection period is 30 days. Currently 2 percent of the accounts receivable turns out to be bad debt. The annual interest rate is 10 percent. The annual operating expense of this department is $400,000. What is the gross profit before interest and tax for the factoring department of IAB?

© BrainMass Inc. brainmass.com October 24, 2018, 9:48 pm ad1c9bdddf
https://brainmass.com/business/auditing/factoring-department-of-inter-american-bank-iab-138238

Solution Preview

The factoring department of Inter American Bank (IAB) is processing 100,000 invoices per year with average invoice value of $1,500. IAB buys the accounts receivable at 4 percent off the invoice value. The ...

Solution Summary

This solution is comprised of a detailed explanation to answer what is the gross profit before interest and tax for the factoring department of IAB.

$2.19
See Also This Related BrainMass Solution

Explaining Weighted Average Cost of Capital


Research Weighted Average Cost of Capital
 and discuss in 1000 words.

View Full Posting Details