Cost of Funds

The Cost of Funds (COF) is an interest payable by the lessor on the funds invested in the transaction. COF normally varies depending on the transaction term and residual percentage.

AFQS has a configurable COF table that is used to determine COF based on the quote term and residual automatically when a quote is calculated.

Subject to the user access privileges, it is also possible to enter a fixed COF stored with the quote. The fixed COF does not change when the COF pricing parameters or the quote term and residual change. To reactivate the automatically calculated COF, clear the Cost of Funds field and recalculate the quote.

COF is used by the Recommended Yield function to determine the rate applied to the quote as COF + Margin where Margin is set up for each term and amount financed band.

See also:

• Calculation Functions