Shareholders invest money in a business.
Typically, a share holder owns such a small portion of a company (through a few shares of stock, for example) that they have no idea or say in the daily operations or hiring/firing decisions. A shareholder typically needs to own a "controlling share" or be on the board of directors to make those decisions.
A finance company that buys other companies' accounts receivable is known as a factor.
Accounts receivable can be defined as the sums owed by customers to a business, and accounts receivable turnover is a financial ratio that is determined by dividing net sales by accounts receivable. This sort of company acquires receivables for less than their face value.
- A factor is a brief, non-recourse loan obtained through the sale of accounts receivable to a third party.
- Consideration is given to all collection risks, including credit losses.
- Although it is used in other industries, the garment industry is where factoring is most prevalent.
- The two primary types of factoring are maturity factoring and discount factoring. Maturity factoring pays the client the purchase price of the factored accounts at maturity, whereas discount factoring pays a discounted price for receivables before they mature.
Learn about more factors here
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The least expensive route is to use "Direct distribution Channel"</h2>
Explanation:
There are two modes where a manufacturer or farmer can reach the product to the customer.
1. Direct channel: This enables the customer to directly buy from the manufacturers.
Example: Online purchase. In this the customer has direct access to the product and orders online. The manufacture has to find a source to deliver the goods to the customer.
Manufacturer should have warehouses, shipping centers, etc to deliver the product.
2. Indirect channel: Relies mainly on intermediaries to perform product distribution to the customers. This includes dealer, sub-dealer and many other to reach the product to the customer.
Answer:
lower than 4.53%
Explanation:
To determine whether the project is viable, we will use the Internal Rate of Return (IRR). This is the rate at which the Net Present Value (NPV) becomes Nil. In other words, the point at which the discounted net cash outflows are equal to the discounted net cash inflows
In this question, there is one outflow of cash worth $220 million at the start of the project (t=0) and one inflow of $300 million in 7 years.
To calculate IRR, we will use the following formula:.
220 = [300 / ((1+r)^7)]
Solving for r, we find that the interest rate is 4.53%.
Given the cash flows, the project should be accepted at all rates below 4.53% as it will create value for the company.
Sustainability is good for a company so people can trust them
