Gamesoft Inc

question 2

Multiple Choice

Gamesoft Inc. has $100 million in annual credit sales that take an average of 40 days to collect. to meet Gamesoft's cash flow problems it maintains a floating loan at 10% interest. Gamesoft says they are indifferent to factoring their receivables at a 3% fee. The factor would advance 70% of the receivables at 8% interest, would cut the collection period down to only 30 days, and eliminate all bad debts. What is the amount of Gamesoft's bad debts that exist by collecting the receivables on its own?

• A) $246,575
• B) $460,274
• C) $1,095,890
• D) $2,610,959
• E) $3,000,000

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Definitions:

You-attitude

A communication approach focused on the needs, interests, and feelings of the audience, rather than the speaker or writer.

Audience's Point Of View

The perspective or standpoint from which an audience perceives or interprets information presented to them.

Double Negatives

The use of two negative words in the same clause, which can either cancel each other out or intensify the negation.

Credibility

The quality of being trusted and believed in, crucial for individuals and organizations to persuade or inform effectively.