Cost of Factoring. Drake Company is contemplating factoring its accounts receivable. The factor will acquire $250,000 of the company’s accounts receivable every 2 months. An advance of 75 percent is...

Cost of Factoring. Drake Company is contemplating factoring its accounts receivable. The factor will acquire $250,000 of the company’s accounts receivable every 2 months. An advance of 75 percent is given by the factor on receivables at an annual charge of 18 percent. There is a 2 percent factor fee associated with receivables purchased. What is the cost of the factoring arrangement?