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Question

The advance finance provided by the factor firm is generally available at __________ interest cost than the usual rate of interest.

A
Medium
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B
Lower
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C
Higher
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D
Equal
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Solution

The correct option is C Higher
  • Factoring, where firms sell their invoices to a factor firm. They do this for some cash right away. This advance finance provided by by the factor firm is available at a higher rate of interest than usual rate of interest as the availability of finances is very quick and has less waiting period.

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