A Company That Factors Its Receivables Will Have a Less

question 28

True/False

A company that factors its receivables will have a less favorable receivable turnover than a company that does not factor.

---

Definitions:

Incremental Cash Flows

The additional cash flow a new project is expected to generate.

After-Tax Salvage Value

The net value of a disposed asset after accounting for any taxes incurred or savings on the salvage.

Financing Costs

Expenses incurred by a company in the process of raising funds, including interest payments, issuance costs of securities, and other related expenses.