Question: Michaels Computers is evaluating proposals from two different factors that will provide receivables financing. Big Fee Factoring will finance the receivables at an annual percentage

Michaels Computers is evaluating proposals from two different factors that will provide receivables financing. Big Fee Factoring will finance the receivables at an annual percentage rate (APR) of 8%, discounted, and charges a fee of 4%. High Rate Factoring offers an APR of 14%(non-discounted) with fees of 2%. The average term of either loan is expected to be 35 days. With an average receivables balance of $250,000, which proposal should Michaels accept?

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