Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. City Farm Insurance has collection centers across the country to speed up collections. The company also makes its Disbursements from remote disbursement centers so

5. City Farm Insurance has collection centers across the country to speed up collections. The company also makes its Disbursements from remote disbursement centers so the firm's checks will take longer to clear the bank. Collection time has been reduced by 2 Days in disbursement time increased by 1 1/2 days because of these policies. Excess funds are being invested in short-term instruments, yielding 5% per annum. A. If City Farm has $4.30 Million per day in collections and $3.50 million per day in disbursements, how many dollars has the cash management system freed up? (Enter your answer in dollars, not millions. (e.g.. $1,234567).) B. How much can City Farm earn in dollars per year on short-term

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance for Non Financial Managers

Authors: Pierre Bergeron

7th edition

176530835, 978-0176530839

More Books

Students also viewed these Finance questions