Victor's Secret sells $10 million in accounts receivable to a factor. The receivables are due in three

Question:

Victor's Secret sells $10 million in to a factor. The receivables are due in three months. The factor charges an upfront (time zero) fee of 2 percent for purchasing the receivables on a nonrecourse basis. The factor also charges a fee of 1 percent per month for every month outstanding on the receivables. The 1 percent per month factoring fee is paid at the time the receivables are sold to the factor.
a. Identify Victor's total upfront factoring fees?
b. What is the all-in cost of the acceptance to Victor's Secret?
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...