Paragraph Styles Cooley Industries needs an additional $500,000, which it plans to obtain through a factoring arrangement. The factor would purchase Cooley's accounts receivables and advance the invoice amount minus a 2 percent commission, on the invoices purchased each month. Cooley sells on terms of net 30 day, In adion, hf factor charges 2 parcent a he tldl ivoi aot, o be deducted in advance a. What amount of accounts receivable must be factored to net $500,000? b. If Cooley can reduce credit expenses by $3,500 per month and avoid bad debt losses of 2.5 percent on the factored amount, what is the total dollar cost of the factoring arrangement? What would be the total cost of the factoring arrangement if Cooley's funding needs rose to S750,000? Would the factoring arrangement be profitable under these circumstances? Assume the conditions described in part b exist. Would it be to Cooley's advantage to offer to pay the factor a commission of 2.5 percent if it would lower the interest rate to 10.5 percent annually? Assume the firm needs $500,000 and the conditions described in part b exist. Assume a commission of 2 percent and an interest rate of 12 percent. What would be the total cost of the factoring arrangement if Cooley's funding needs rose to $650,000? Would the factoring arrangement be profitable under these circumstances? c. d. e