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What would be synthias cost of factoring the receivables

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Reference no: EM131105129

Synthia Corp. factored $750,000 of accounts receivable to Thomas Company on December 3, year 2. Control was surrendered by Synthia. Thomas accepted the receivables subject to recourse for nonpayment. Thomas assessed a fee of 2% and retains a hold back equal to 4% of the accounts receivable.

In addition, Thomas charged 12% interest computed on a weighted-average time to maturity of the receivables of fifty-one days. The fair value of the recourse obligation is $15,000. Assuming all receivables are collected, what would be Synthia's cost of factoring the receivables?

Reference no: EM131105129

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