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What is meant by returns to a factor. (1 mark definition)

Returns to a factor refers to the change in output when an additional unit of variable input is employed.

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Feesreceived by afactoringcompanyfor itsservices. A factor companypurchasesaccounts receivablesfrom another company andcollectsthereceivablesin its behalf. Aspaymentfor its services, the factor companyretainsa portion of theamountcollected from the receivables.

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