Credit control paper 1 task 1.2i

jazzies123

Hi all
Can anyone help me please? I don't understand task 2part i) in practice assessment 1. It says : a finance company has offered to provide a facility where ABC can borrow up to £90000 or a maximum of 75% of the total outstanding sales ledger. The finance company administrator the sales ledger on behalf of ABC for a fee of £2000 per month
The maximum amount available to borrow at the 30th June is .......... The answer is 900000 but I can't make it out! Any ideas?

Thanks in advance

LearningAcademy

Hi
Total amt. of receivables as per the task: £1,254,356. ABC can borrow 75% of this amount (i.e. £940,767). However, there is a maximum limit of £900,000. Hence they can borrow £900,000 only.

thanks